FRANKFURT (MNI) – The European Central Bank’s non-standard
liquidity measures constitute a strong intervention in the market and
are only to be maintained as “absolutely necessary,” ECB Executive Board
member Juergen Stark said Thursday.
The central bank has, thus, already begun the process of
withdrawing measures and further steps in this direction will follow
“together with the gradual normalization of conditions in financial
markets,” he told a convention audience in the German city of Essen,
according to a speech text provided in advance by the bank.
The central bank’s “current monetary policy stance is accommodative
and, in view of the economic stabilization, if anything has become more
accommodative over the previous quarters,” Stark added.
“In regards to price stability, the current interest rates are
still appropriate,” he said.
“The risk exists, however, that too loose a monetary policy — and
I mean both the interest rate level and the special measures — can
potentially lead to undesired side effects in the medium term,” he
cautioned.
The price outlook in the Eurozone “is still moderate,” Stark said,
noting that the current level of inflation is at 1.9%, just below 2%.
“Also for 2011 we expect moderate rates of [inflation],” he said, adding
that “mild upward risks exist, especially [ones that] are linked with
energy and commodity prices (excluding oil prices).”
–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com
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