FRANKFURT, April 11 Major central banks should
prepare to normalise monetary policy as deflation risks have
mostly disappeared from their economies and growth is picking
up, the head of the Bank for International Settlements said on
The fact that that path might be bumpy was no reason for
delay, though each central bank should choose the right moment
to start the process for itself, BIS head Jaime Caruana told
German daily Boersen-Zeitung.
The U.S. Federal Reserve is winding down its stimulus,
having increased interest rates and looking on track to hike
them at least twice more this year.
The picture in the euro zone is less clear, with the
European Central Bank holding its main policy rate at zero
In the face of mounting calls from Germany to scale back its
stimulus as inflation picks up, it is also set to continue
pumping billions of euros into the economy every month until the
end of the year.
Three of the bank's top policymakers said on Thursday it
would stick to that plan for some time as it was not yet
convinced the euro zone economy had turned the corner.
Caruana, a former head of the Bank of Spain, said that,
while the need for very expansive monetary policy had receded,
central banks were moving through uncharted territory.
"It is therefore right to proceed gradually and
cautiously... (But) it is important that now that monetary
policy normalisation has begun, this process should continue,"
he was quoted as saying.
(Reporting by Andreas Framke; editing by John Stonestreet)