The head of the Central Bank of France advises ECB to stick to the current policy
The European Central Bank must adhere to the current monetary policy, he said the head of the Bank of France on Wednesday, backed the view that the regulator will not change course during the meeting next week.
ECB resorted to additional incentives for a few years to accelerate inflation, but in the last three years has failed to achieve the target inflation index. Now the regulator confronted with calls for yet more policy easing, but it relies heavily on unproven and unconventional instruments such as negative rates and large-scale buying of assets.
Speaking at a business forum in Frankfurt am Main, Fransua Vilrua de Gallo said that the ECB will need to maintain a cautious stance and that instruments such as money, going directly from central banks to consumers are not appropriate.
"Negative interest rates are useful, but it is only one of many tools, and they have their limit – Villeroy said that as part of the ECB Governing Council, which decides on rates. – Therefore, we must adhere to the current monetary policy. And yes, we are doing it consistently".
The next meeting of the ECB, which will decide on the rates, will be held on 8 September.
the euro zone economy is under pressure from the time of the debt crisis, and it is still coming hard times, because unemployment is kept at 10 per cent, the authorities are trying to reduce the substantial debts, while the private sector is struggling with a large amount of unused capacity.
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