MNI: ECB accts - Monpol Reassessment Must be Gradual, Cautious

By Christian Vits

     FRANKFURT (MNI) - European Central Bank policymakers underlined in their

most recent policy meeting on Sept 7 the need for monetary policy to remain

"persistent and patient".

     "Any reassessment of the monetary policy stance should proceed in a very

gradual and cautious manner," Governing Council members agreed, according to the

accounts of the meeting, released Thursday. 

     They said that "a very substantial degree of monetary policy accommodation

was still needed" for inflation to converge sustainably to levels in line with

the ECB's target.

     On Oct 26, the ECB Governing Council will meet again and discuss whether

and when it will wind down its stimulus measures, with the discussions coming

against the background of solid growth and falling unemployment across the euro

zone. But inflation in the currency bloc remains below the ECB's target of

"below but close to" 2%. Eurozone inflation held steady in September at 1.5%,

unchanged from the previous month.

     Looking ahead, the bank expects inflation rates to "temporarily decline

towards the turn of the year", mainly reflecting base effects in energy prices.

Still, "measures of underlying inflation have ticked up moderately in recent

months, but have yet to show convincing signs of a sustained upward trend," ECB

president Mario Draghi said after the last meeting in September.

     Policymakers also noted "concerns" about a possible over appreciation of

the euro. "Concerns were expressed, notably about the recent momentum," the

accounts said.

--MNI Frankfurt Bureau; +49 69 97782671; email: christian.vits@marketnews.com

[TOPICS: M$X$$$,M$$EC$]