Press Release No. 08/237

Press Release: Statement by IMF Managing Director Strauss-Kahn on Coordinated Interest Rate Cuts and Further Policy Action

October 8, 2008

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement today:

"We welcome the coordinated reduction of interest rates undertaken today by major central banks, as well as the unprecedented joint actions they have taken to reduce strains in the financial markets. This is the right course of action in the face of the deflationary impact of the major financial shock in mature markets and against a background of declining inflation pressures. We also commend the statements made in recent days by the authorities of major countries demonstrating their readiness to act to secure stability and growth and to promote an orderly functioning of the international financial system.

"Based on these actions and commitments, we believe that the following additional coordinated actions would be warranted to address key remaining challenges: (i) provision of liquidity to financial institutions and other measures to facilitate market functioning and adequate credit to households and businesses; (ii) strengthening of financial institutions, including appropriate recapitalization and removing distressed assets from bank balance sheets; and (iii) adequate protection of depositors.

"These actions should help to restore trust and confidence in financial markets needed to break the negative feedback loop to the real economy."