ECB Chief defends high interest rates policy

European Central Bank President Christine Lagarde Monday defended her high interest rates policy arguing that it was necessary to stay on the course taken and that there was currently no discussion in the ECB about reducing rates. Speaking in the European Parliament's Economic and Monetary Affairs committee in Brussels, Lagarde faced repeated questioning from MEPs about ECB's interest rate hikes and inflation, said an EP press release. They argued that the inflation at hand was a supply based one and therefore should not be tackled by raising interest rates. The interest rate hikes were harming working families and economic growth for no good reason, they said. While acknowledging that a component of inflation was supply based, Lagarde said it was important to anchor investment expectations to bring back investor confidence. Some MEPs questioned Lagarde on the roll out of a digital euro and how to deal with the excess liquidity currently held by the EU's banks. During her opening statement to the MEPs, she outlined the economic outlook, including inflation expectations for the Euroarea, outlining that rates will be set at sufficiently restrictive levels for as long as necessary, and explained the work being done by the ECB to address the excess liquidity in the system. Source: Kuwait News Agency