Business News

CCTV Script 11/04/13


This is the script for CNBC's news report for China's CCTV on Thursday, 11 April.

Welcome to the CNBC Business Daily.

IMF Chief Christine Lagarde says the global economy looks less dangerous than it did six months ago, thanks to accomodative policies by central banks around the world. CNBC's Maria Bartiromo asked her if she was concerned about the rush of easy money.

[Package: Mario Bartiromo's interview with IMF Chief Christine Lagarde]

Christine Lagarde: It's unconventional monetary policy, let's face it, because we are in a low interest environment and more needs to be done.

At the moment, governments with their fiscal policies have minimal space, and yet growth has to pick up. So who has to bear the burden? Central bankers, with monetary policies that are unconventional, whether it's quantitative easing in the US, or outright monetary transaction programs, or funding for lending. All these new programs that have been announced by the Japanese authorities.

They're doing all that they can to encourage growth, to kick start growth when there has been none for a long time like in Japan. And to make sure that credit flows into the real economy, so that investment can start again.

Maria Bartiromo: There's so much debate about this subject. Today we're hearing all different commentary on when the Federal Reserve should ease back on its stimulus. Do you think there are damages to this plan longer term? I know you said in your speech that inflation is okay for now, but what are the downside risks should the Federal Reserve continue with this until 2015, vs stopping this summer, which is of course what some people are calling for?

Christine Lagarde: First of all, I would observe that the Fed has indicated that they do so with two compasses. One, inflation - and they're keeping a very attentive eye to inflation. Second, unemployment. They want to be driven by both this compasses.

What we see at the moment is inflation under control, inflation clearly under 2%. And what we've observed lately, is that the usual binary relationship between unemployment and inflation has faded in a way. So the risk, traditionally, would be accomodative monetary policy, massive liquidity, and the risk of inflation picking up.

There is probably lesss of that, and core inflation anticipation are clearly anchored down. As long as that is the case, and given that the fiscal tool is not available at the moment, then the monetary policy should continue as it does, and the path out of it should be gradual, should be thought through, should be adequately communicated. It's for central bankers to decide how they're going to go about it.

Li Sixuan, from CNBC's Asia headquarters.