European Central Bank (ECB) president Wim Duisenberg today said current ECB interest rates were appropriate and took account of the central bank's projected inflation outlook - thereby dampening hopes of another rate cut soon. "Let me be crystal clear on that - the current monetary policy stance, in the eyes of the governing council, with interest rates at 2pc, is regarded as being appropriate in the light of the developments we foresee for the medium-term future," he told the European Parliament.
Duisenberg said the ECB expected inflation to hover around 2pc for the remainder of year, then fall "significantly" below 2pc early next year, mainly as a result of base effects, before climbing back towards the 2pc level later in 2004 and in 2005. Austrian National Bank governor Klaus Liebscher had previously said that the ECB saw inflation remaining well below 2pc in both 2004 and 2005. Duisenberg said the ECB was on its guard to fight against any risks of both inflation and deflation, if they were to emerge.//www.fxcentre.com