Duisenberg dashes hopes of further rate cuts

European Central Bank president Mr Wim Duisenberg said today further interest rate cuts will only happen if inflation continues to fall further.

"The ECB would lower interest rates if we came to the conclusion that we must lower our assumptions on the development of inflation within the next 18 months," said Mr Duisenberg in an interview with German daily Handelsblatt.

Mr Duisenberg expects eurozone inflation to fall to below 2 per cent and will on average remain below this level in 2002, 2003, the paper said.

However, rate cuts may not be necessary if the economy recovers, the paper said.

PA