“Rate hikes are the most appropriate instrument” says Lagarde

WASHINGTON (Reuters) – Raising interest rates remains the most appropriate monetary policy tool to fight inflation even as the debate over shrinking the European Central Bank’s (ECB) balance sheet has begun, said Wednesday Christine Lagarde, the president of the institution.

“The traditional interest rate (…), in the current circumstances, is the most efficient, the most appropriate and, based on the proportionality assessment that we carry out to choose from our toolbox, it is the one that works best,” she said at a conference organized by the Institute of International Finance (IIF) in Washington.

(Report Balazs Koranyi, French version Marc Angrand, edited by Matthieu Protard)