IMF supports ECB interest rate decision

5 November 2010

The International Monetary Fund (IMF) has said the European Central Bank (ECB) was justified in holding interest rates this week.

In comments reported by Reuters from Washington DC, IMF spokesperson Caroline Atkinson described the ECB's decision as "perfectly appropriate for monetary policy in Europe".

On Thursday (November 4th), the central bank opted to keep interest rates in the eurozone at the record low of one per cent for the 18th consecutive month.

ECB president Jean-Claude Trichet declined to implement fresh stimulus measures in Europe, despite the Federal Reserve confirming a second round of quantitative easing for the US on Wednesday.

Ms Atkinson said the IMF also supports the Fed's decision to pump more money into the American economy by purchasing $600 billion in government bonds.

"We expect it will have a positive impact on the economy, although that may be modest," she commented.

The Bank of England's Monetary Policy Committee also said there will no extension to its stimulus programme after meeting on Thursday.

By Claire Archer

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