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Fears over euro zone inflation resurgence exaggerated: Villeroy

Reuters , Thursday 26 Jan 2017
Francois Villeroy
Governor of the Bank of France Francois Villeroy de Galhau attends a press conference after the Franco-German Financial Council meeting in Berlin, Germany, September 23, 2016 (Photo: Reuters)

Fears over a resurgence of inflation in the euro zone are exaggerated so it is not yet time to discuss an exit from the European Central Bank's unprecedented stimulus program, Governing Council Member Francois Villeroy de Galhau said on Thursday.

German inflation may soon peak over 2 percent, the ECB's target, but it will ease back and average below 2 percent this year, Villeroy said in Munich, responding to German criticism of the ECB's exceptionally loose policies.

"It is not our aim to keep interest rates low for too long: low interest rates are not a goal in themselves, they are merely the necessary condition today for gradually returning toward our inflation target" Villeroy said.

"But, although quantitative easing will obviously not last forever, we clearly did not discuss tapering or any exit strategy.


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