ECB needs to maintain tight policy, says IMF

Policy rates, rather than quantitative tightening, should be main tool, IMF directors say

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Photo: Flickr/freeimage4life

The International Monetary Fund has said the European Central Bank needs to maintain a tight monetary policy, and should consider shrinking its balance sheet further.

The fund’s latest article IV assessment of the eurozone, released today (July 19) says policy rates, rather than quantitative tightening, should be the ECB’s main tool.

“While headline inflation has fallen sharply recently after reaching record high levels, core inflation is proving more persistent,” the IMF report says. The ECB

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