12 May 2014
ECB's Constancio and Nowotny refuse to speculate on possible action in June
FXStreet (Łódź) - ECB governing council members Vítor Constancio and Ewald Nowotny, who spoke today at at an Austrian Central Bank conference in Vienna, said that it was too early to speculate about the central bank's actions at the June meeting.
Constancio, who stated that he didn't expect deflation in the EU, signaled that ECB's upcoming decision would be dependent on the mid-term inflation projections.
"We need to know better after the low inflation monthly figures that we have had recently what will be the prospects for the medium-term path of inflation.” he said. “That will be the main criteria for any decision by the governing council."
The Governing Council member reiterated that the exchange rate is not a policy target, although the ECB would closely observe the euro's strength.
Nowotny meanwhile suggested that the ECB was considering various measures to adopt, as only reducing the interest rate alone could be insufficient.
He also commented on the Eurozone banking union saying that it could boost confidence in the bloc's financial institutions but on the other hand the increased regulation “might cause important and risky business activities to be shifted into less regulated areas, such as shadow banking entities.”
Constancio, who stated that he didn't expect deflation in the EU, signaled that ECB's upcoming decision would be dependent on the mid-term inflation projections.
"We need to know better after the low inflation monthly figures that we have had recently what will be the prospects for the medium-term path of inflation.” he said. “That will be the main criteria for any decision by the governing council."
The Governing Council member reiterated that the exchange rate is not a policy target, although the ECB would closely observe the euro's strength.
Nowotny meanwhile suggested that the ECB was considering various measures to adopt, as only reducing the interest rate alone could be insufficient.
He also commented on the Eurozone banking union saying that it could boost confidence in the bloc's financial institutions but on the other hand the increased regulation “might cause important and risky business activities to be shifted into less regulated areas, such as shadow banking entities.”