VIENNA, June 27 - The European Central Bank is holding off on interest rate moves for now and will see whether more monetary easing is needed as inflation falls, ECB Governing Council Member Klaus Liebscher said on Friday. In an interview with , Liebscher said he is "very much impressed" by prospects that inflation will drop below the ECB's two percent ceiling in the year ahead and achieve price stability, and he expects this to support economic recovery in the euro zone by improving domestic spending power. "One can have cautious optimism for the near and far future," Liebscher said. "Obviously there is a bottoming out and confidence is coming back." Asked whether monetary policy would remain appropriate if inflation falls toward one percent, as ECB staff projections suggest, Liebscher said: "We will see when that happens. But what we are expecting is (inflation) clearly below two percent."
He also said that the one-percentage point interest rate gap between the U.S. and the euro zone shows there remains room for manoevre on ECB monetary policy. "If necessary," he said, adding: "But I think we have primarily also the policy to keep the powder dry."//