WASHINGTON, D.C. — Central banks face a "difficult balancing act" as they start lowering interest rates around the world in the face of falling inflation, the head of the International Monetary Fund said on Friday.

Central banks on both sides of the Atlantic have cut rates this year, with the US Federal Reserve reducing its benchmark lending rate by half a percentage point on Wednesday in a bid to boost demand, a few months after the European Central Bank (ECB) began lowering its key rate.

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