ECB Weidmann: Uncertainty About Inflation Path 'Quite Large'

By Jack Duffy

     PARIS (MNI) - Bundesbank President Jens Weidmann said Friday that

uncertainty over the Eurozone inflation outlook was "quite large" and explained

the European Central Bank's cautious view of monetary policy. 

     Speaking in Hamburg, Weidmann said "the forecasts presented yesterday show

that the increase in inflation will only be sluggish and that the uncertainty

about the future inflation path is quite large." 

     Weidmann said that "for this reason, the Governing Council has decided to

wait and see the monetary policy situation in the near future."

     ECB President Mario Draghi said the Governing Council had "preliminary"

talks at Thursday's meeting about scaling back the bank's E2.3 trillion QE bond

buying program but that the bulk of the decisions would be taken in October. 

     Draghi said that the rising euro was "a source of uncertainty which

requires monitoring." While not a target, Draghi said the exchange rate was

"very important for growth and inflation."

     The euro reached a high of $1.2092 early Friday before easing back to

$1.2064 at midday. 

--MNI Paris Bureau; tel: +33 1-42-71-55-41; email: jack.duffy@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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