January 26, 2006	Thursday	Zilhaj 25, 1426

FRANKFURT, Jan 25: The European Central Bank must be careful about raising rates as there are no clear signals about how strong growth is, Executive Board member Lorenzo Bini Smaghi was quoted as saying on Wednesday in an interview with German newspaper Die Zeit.

Nonetheless, it would have been dangerous to leave real interest rates negative when there is no risk of recession, Bini Smaghi said in justifiation of the ECB’s December rate rise, its first in five years.

Bini Smaghi’s remarks appeared to be in slight contrast to those of ECB chief economist Otmar Issing.

In another interview with Die Welt, extracts from which were published on Tuesday, Issing accepted that the ECB should not raise rates at the pace of the US Federal Reserve, but noted that the ECB was ready to raise rates whenever necessary — wording used in the run-up to the ECB’s December rate rise.—Reuters