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(CEP News) - As deflation risks continue to rise in the euro zone, the European Central Bank (ECB) will continue to discuss monetary policy measures including cutting money market rates further, longer term loans from the ECB and the possibility of asset purchases, according to Cypriot Central Banker Athanasios Orhpanides.
"If inflation threatens to remain significantly below 2 percent for a considerable period of time, then additional policy easing could be warranted to counter that eventuality," said the central banker in an interview with Bloomberg on April 11. Orphanides further confirmed that the benchmark interest rate could be cut further if deflation risks continue to mount. He also said that downward pressure on prices could extend beyond 2010. According to the article, the comments imply that the central bank could continue to stimulate monetary policy beyond its meeting on May 7. Up to now, ECB President Jean-Claude Trichet has indicated that rates will be cut at a "measured" pace, and that the deposit rate would not be allowed to go lower. Trichet furthermore told reporters that his press conference in May would contain the details, if any, of alternative monetary policies from the ECB to stimulate the euro zone economy. By Erik Kevin Franco,
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; edited by Nick Say,
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