(CEP News) - Alternative monetary policies will only be deployed if deflation pressures were to mount in euro zone countries, Bundesbank President Axel Weber said on Thursday.In a press conference with reporters in Frankfurt, the central banker said the European Central Bank plans to continue with its extraordinary liquidity-providing operations for now and will consider further action if things get worse.
For now, the ECB continues to have room to cut rates further if needed, he added.
His comments mirror those made by European Central Bank President Jean-Claude Trichet on Thursday who, after cutting rates 50 bps to 1.50% as expected, explicitly said alternative policies are being considered and that none would be forthcoming for now.
Trichet also declined to elaborate on whether the purchase of corporate paper is under consideration.
By Erik Kevin Franco, efranco@economicnews.ca, edited by Stephen Huebl, shuebl@economicnews.ca
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