MNI: ECB Constancio - FX Volatility Clouds Price Stab Outlook

By Christian Vits

     WASHINGTON (MNI) - The recent volatility of the euro's exchange rate still

is a concern for the European Central Bank, ECB Vice President Vitor Constancio

said Sunday.

     "There are uncertainties clouding the medium-term outlook for price

stability, most notably the recent exchange rate volatility, which requires

monitoring with regard to possible implications for inflation dynamics,"

Constancio said at the G-30 International Banking Seminar in Washington.

     The inflation outlook from the recent International Monetary Fund's World

Economic Outlook forecasts inflation at 1.5% in 2017 and 1.4% in 2018, which is

broadly in line with ECB projections.

     "Despite robust growth dynamics, inflation developments have been subdued,"

he added. Euro area inflation stood at 1.5% in September, unchanged from the

previous month.

     "It is expected to temporarily decline towards the turn of the year owing

to energy-related base-effects. Measures of underlying inflation have not yet

showed convincing signs of a sustained upward trend," Constancio stressed.

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

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