BRUSSELS (MNI) – The European Central Bank is prepared to adjust
monetary policy as economic developments require, ECB Vice-President
Vitor Constancio said Wednesday.
Speaking to the European Parliament’s Economic and Monetary Affairs
Committee in Brussels, Constancio described upside inflation risks
stemming from commodity prices and higher indirect taxes, and the
downside risk of weaker economic growth.
“We still depend on what is going to happen with the economy, but
if those risks that we mentioned turn out to be true, then rest assured
that we will adapt our policy, as we did last year,” Constancio said.
“Last year is a phenomenal example of that principle,” he added,
noting how the ECB raised rates in the first half of 2011 when it saw
signs of rising economic growth and inflation, and then “immediately
adjusted our policy” when the economic situation began to change.
“First of all we increased rates and then we reduced them, which
proves that we are always watching the economic situation very closely
and within the limits of our mandate we adjust policy accordingly,”
Constancio said.
–Brussels newsroom: +324-9522-8374; pkoh@marketnews.com
[TOPICS: M$$EC$,M$X$$$,MT$$$$,MGX$$$,M$$CR$]
