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ECB's bazooka has not run out of ammunition, chief economist says

Section: Daily Dispatches

By Szu Ping Chan
The Telegraph, London
Friday, March 18, 2016

The European Central Bank is prepared to slash interest rates deeper into negative territory if the economic outlook deteriorates, according to its chief economist.

The economist, Peter Praet, insisted that the central bank had not run out of ammunition as he left the door open to pumping cash directly into the real economy through so-called "helicopter drops."

"If new negative shocks should worsen the outlook, or if financing conditions should not adjust in the direction and to the extent that is necessary to boost the economy and inflation, a rate reduction remains in our armory," he told Italian newspaper La Repubblica.

"We have not reached the physical lower bound" on rates.

Underscoring the ECB's determination to drive inflation back up to its target of just below 2 percent, Mr. Praet did not rule out printing money and giving it away to households. ...

... For the remainder of the report:

http://www.telegraph.co.uk/business/2016/03/18/ecbs-bazooka-has-not-run-...



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