Gita Gopinath, the first deputy managing director at the International Monetary Fund (IMF), told CNBC-TV18 at Davos on Monday that she thinks interest rates will have to go up even further to bring down inflation.“If there is a much more rapid tightening of interest rates, which is needed, that could raise borrowing costs around the world quite sharply. Given how elevated inflation is and given how broad-based it is, I think there is a significant chance that interest rates might have to go up even further to bring down inflation durably," she said.She said that based on current projections, inflation does come down over time but quite gradually. "So, if it needs to get faster down to its 2 percent target, we may need to raise interest rates much more,” she added.Gopinath said emerging markets had seen a reversal of portfolio flows, but India is better placed than most other countries to handle the volatility.“We have seen a reversal in portfolio flows to emerging markets. A lot of that is China-specific, but we have also seen it from India. How individual countries adapt to this environment depends upon the strength of their macro environment,” she saidGopinath said India had around $600 billion of reserves, which cover about eight months of its imports, so it is in a better position to handle this volatility. She also said India's external debt is around 20 percent of the GDP, which also puts the nation in a somewhat better position."However, there are countries where the situation is far more precarious, the countries are already in debt distress, and they will have to deal with taking precautionary steps on their fiscal front to deal with this volatile environment. In some cases, you will just need outright debt restructuring,” IMF's deputy managing director said.Speaking about cryptocurrencies, she said crypto markets had seen a drop of 50 percent, and so these assets are as risky as other assets to own.“The crypto market has gone from being close to $3 trillion six months ago to being $1.5 trillion – a 50 percent drop. So, what it tells you is, crypto assets are like any other extremely risky assets to own.”Watch the video for more.