IMF: ECB Has More Room To Ease, Use Unconventional Measures

17-May (Dow Jones) — The International Monetary Fund on Thursday again hinted that the European Central Bank should lower policy rates and continue its sovereign bond-buying program to help save the euro zone.

“The ECB has room for further monetary easing, given the expected weakening of underlying pressures,” said spokesman David Hawley during a regular press briefing.

“The policy rate remains at an historic lower bound of 1% but this could be reduced further as inflation is expected to drop well below 2%,” he said.

Asked if the ECB should continue its purchases of buying bonds, Hawley also said that “further unconventional policy measures may also be needed.” Hawley, who didn’t elaborate, could also have been referring to the central bank’s cheap loan program that helped to avoid another credit crunch in the region that would have wilted growth prospects further.

In recent weeks, the IMF has criticized the ECB, saying governors are overly concerned about fueling inflation.

[source]

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