Growth and job creation are the major challenges for the global economy while the low interest rate environment presents a risk, the International Monetary Fund's (IMF) deputy managing director Zhu Min told CNBC on Tuesday.
It's important for central banks to keep interest rates low amid weak global growth but the rise in risk appetite amid ample liquidity is a concern, Zhu said.
"We see long-term uncertainty for the people looking for yield... or for the returns in the market," said Zhu. "[It's] important to observe the risks associated with low interest rates."
Interest rates at major central banks including the Federal Reserve, the European Central Bank and the Bank of England are currently at record lows.
Read MoreIMF cuts global growth outlook as US recovery falters
The two biggest economies
The timing of a Fed rate hike has been the subject of much debate this year. It's uncertain whether the Fed will act in the first or second half of 2015 but whatever happens, Zhu doesn't expect the central bank to take markets by surprise.
"I don't think we will see rates rising very soon and very quickly because growth is still relatively weak," he said. "Growth inthe first half of the year was surprisingly weak."
Meanwhile, Zhu seemed upbeat on the Chinese economy despite IMF director Christine Lagarde's warning of a potential hard landing in April.
"Overall the Chinese economy runs quite well, and we expect the Chinese growth rates for this year [at] roughly from 7.2 to 7.5 [percent]," he said, noting that low inflation of 2.3 to 2.4 percent would help.
Read MoreIMF warns Ukraine on bailout if it loses east
China set a 2014 growth target of 7.5 percent at the National People's Congress in May. Talk of a 'hard landing' began last year as China's transition away from a manufacturing-led economy weighed on growth and increased this year amid mixed economic data, though few agree on what would constitute a hard landing.
Ukraine "on track"
Separately, Zhu also told CNBC that Ukraine is on track with conditions of the organization's loan program.
On Friday, the IMF signed off on its first review of Ukraine's $17 billion loan program, unveiled in May, releasing $1.4 billion in fresh funds.However, it warned of looming risks should tensions between Ukraine and Russia escalate.
Anti-government protests in February saw the overthrow of Ukrainian president Viktor Yanukovych and paved the way for Russia's annexation of Crimea in March. Political and military turmoil continue to afflict Ukraine, dragging the economy and undermining the currency.
Read MoreSanctions bring Russian growth to standstill: IMF
Still, Ukraine is making good progress with most of its loan obligations, especially in facilitating economic reforms, Zhu said.
"The government is open to take on and carry out structural reforms to promote further growth. I think that's very important, for us to work together to ensure the program is on track continuously," he said.
"At this moment, I think the debt restructuring and the debt re-profiling are not on the table," he added.