Rates cut won't boost economy - Duisenberg

 

A further cut in interest rates would not suffice on its own to get the euro-zone economy back on its feet, European Central Bank President Mr Wim Duisenberg said in a newspaper interview published this morning.

"Further monetary easing can hardly lift the uncertainty thathas been weighing on the economy for months," Duisenberg told thedaily Frankfurter Allgemeine Zeitung.

"A lot more than an additional rate cut is needed to restoreconsumer and business confidence," he added.

In comments made on the sidelines of the meeting of Group ofSeven finance ministers, the World Bank and the InternationalMonetary Fund in Washington over the weekend, the ECB chiefreaffirmed the bank's belief that the current level of interestrates in the 12-country zone was appropriate to safeguard pricestability.

And answering calls by the IMF for the ECB to use additionalroom for manoeuvre on rates, Duisenberg noted that borrowing costsin the single-currency region were already at their lowest levelssince World War II.

In a separate interview published in the business daily Handelsblatt, Bundesbank President. Mr Ernst Welteke, also seemed to wantto dampen speculation about a further monetary easing any time soon.