FRANKFURT (MNI) – ECB Governing Council member Christian Noyer said
the central bank remains in a state of “very strong vigilance”,
according to an interview published Tuesday by the Financial Times
Deutschland.
In a broad-ranging interview, Noyer reminded that the ECB never
precommits to a defined policy. He explained the July interest rate hike
by the ECB’s determination not to let recent price trends become
entrenched:
“We wanted to send a clear signal that inflationary pressure from
rising oil and commodity prices must not be transformed into permanent
price increases via second-round effects.”
However, Noyer conceded that oil prices had stabilized recently and
that Eurozone growth had lost momentum in the second quarter. At the
same time, he noted ongoing price rises for some raw materials,
increasing capacity utilization and potential upside pressure on
prices due to tax hikes in some countries, which he said would keep the
ECB in a state of strong vigilance.
Turning to the pressure on ECB Executive Board member Lorenzo Bini
Smaghi to step down before the end of his mandate in 2013, once his
countryman Mario Draghi takes over the ECB presidency in November, Noyer
said the ECB Council would ensure that the independence of its mandate
was “not damaged.”
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