Washington (dpa) - The European Central Bank (ECB) could still cut
interest rates to spur growth in the recession-plagued eurozone,
International Monetary Fund chief Christine Lagarde said Thursday.
"Of all the major central banks in the world, clearly the ECB is
the one that still has room to manoeuvre," she said ahead of the
IMF's spring meetings in Washington. "It will be for them
independently to determine when is the right time to use that space
and potentially reduce interest rates."
The bank's benchmark interest rate for the 17-member eurozone is
now 0.75 per cent.
The US Federal Reserve, in comparison, dropped its key rate to
near zero more than four years ago and has issued policy guidance
suggesting it would maintain that level until unemployment declines
significantly - likely for years to come - barring signs of
inflation.
Furthermore, the Fed has undertaken a buying spree of government
bonds, so-called quantitative easing, to push investment into the
private sector, a monetary policy that amounts to printing money at a
current rate of 85 billion dollars a month.
