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10/26/2018, 4:25 PM (Source: TeleTrader)
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ECB's Coeure praises rate-setters for guidance

One of the highest officials of the European Central Bank said on Friday that its communication, and that of other top monetary authorities, has become "much clearer" and that it helped mitigate volatility in cross-border capital flows. Speaking in Paris, Benoit Coeure added policymakers also committed to "handle changes to the size of their balance sheet with care." Central bankers thus managed to "pursue their domestic objectives" and at the same time avoid "sending shock waves" through financial markets.

"None of this is to say that markets are immune to foreign spillovers. In an integrated global financial market, central banks need to calibrate their policies according to their domestic mandates," the French economist stated. The member of the ECB's board repeated economic stability is still dependent on "significant monetary policy stimulus."

By saying they expect benchmark borrowing costs to remain on hold at least through the summer of next year, rate-setters helped capital flows by residents of the Eurozone to be "rather unreactive" as quantitative easing is nearing the finish line at the end of December, Coeure said.

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