The European Central Bank's (ECB) current interest rate settings are appropriate, ECB executive board member Ms Gertrude Tumpel-Gugerell said yesterday.
Ms Tumpel-Gugerell told Germany's Boersen-Zeitung that the ECB sees no evidence that euro-zone inflationary pressure is increasing but that there are still risks to price stability in the medium term.
Asked about possible inflationary pressures from excessive liquidity and high lending rates, Ms Tumpel-Gugerell said the ECB kept a close watch on market developments.
"We think the market has ample liquidity available at the moment to meet its financing needs," she said.
"Despite this fact, our overall assessment remains unchanged, and that is that current monetary policy settings are appropriate."
The ECB left benchmark interest rates at 2 per cent in the 12-nation euro zone in December.
The central bank's executive board considered a rate hike before opting for an 18th month on hold.
Ms Tumpel-Gugerell said there was no room for complacency on inflation because of the ongoing risk from higher oil prices, rises in indirect taxes and administrative prices.
"There are no clear signs that stronger domestic inflationary pressure is building up," Ms Tumpel-Gugerell said.
Reuters
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