16 Jan 2014
Buba's Weidmann backs ECB's dovish policy
FXstreet.com (Łódź) - Bundesbank president Jens Weidmann said today in Berlin that most of the Eurozone countries still struggling with the effects of the financial crisis should soon enter the path of steady recovery. The German economy meanwhile should continue expanding this and next year, he suggested.
Furthermore, Weidmann responded to German criticism against Mario Draghi's low interest rate policy by saying that it was currently appropriate. He nevertheless reminded that keeping rates low for too long could have negative implications for the economy.
"An ultra loose monetary policy is a therapy with risks and side effects. It cannot become a permanent therapy," Weidmann emphasized.
The Buba head also advised against becoming irrationally preoccupied with inflation, adding that "in the current economic situation, the risk is of a broad deflation in the Eurozone is limited."
Furthermore, Weidmann responded to German criticism against Mario Draghi's low interest rate policy by saying that it was currently appropriate. He nevertheless reminded that keeping rates low for too long could have negative implications for the economy.
"An ultra loose monetary policy is a therapy with risks and side effects. It cannot become a permanent therapy," Weidmann emphasized.
The Buba head also advised against becoming irrationally preoccupied with inflation, adding that "in the current economic situation, the risk is of a broad deflation in the Eurozone is limited."