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ECB's stimulus decisions help raise inflation expectations: IMF chief

Xinhua, January 23, 2015 Adjust font size:

The International Monetary Fund (IMF) Managing Director Christine Lagarde welcomed Thursday the latest decision by the European Central Bank (ECB) to launch a massive stimulus program in an effort to support the eurozone's fragile economy.

The IMF chief said in a statement that "the planned expansion of the ECB's balance sheet will help lower borrowing cost across the euro area, raise inflation expectations and reduce the risk of a protracted period of low inflation."

Lagarde said these measures will also "strongly" increase the prospects of the ECB achieving its price stability mandate.

"It remains essential that the accommodative monetary stance is supported by comprehensive and timely policy actions in other areas, not least structural reforms to boost potential growth and ensure broad political support for demand management policies," the IMF chief added.

The ECB on Thursday decided to purchase over one trillion euros in public and private sector bonds by the fall of 2016 to counter the deflationary risk and possible stagnation. Endite