MNI: ECB Draghi Still Expects "Gradual" Increase in Inflation

By Christian Vits

     FRANKFURT (MNI) - Price pressures in the euro area will gradually move

upwards in line with the robust economic expansion, European Central Bank

President Mario Draghi said Monday.

     "We anticipate that headline inflation will resume its gradual upward

adjustment, supported by our monetary policy measures. At the same time,

uncertainties continue to prevail," Draghi told a hearing at the European

Parliament in Brussels.

     "In particular, the recent volatility in financial markets, notably also in

the exchange rate, deserves close monitoring with regard to its possible

implications for the medium-term outlook for price stability," he added.

     While the strong momentum of the euro area economy has "clearly

strengthened" the ECB's confidence in the inflation outlook, patience and

persistence with regard to monetary policy is still needed for inflation to

sustainably return to levels of below, but close to, 2%, Draghi said.

     The evolution of inflation remains "crucially conditional" on an ample

degree of monetary stimulus provided by the full set of the bank's monetary

policy measures, Draghi noted. 

     This applies to the ECB's "net asset purchases, the sizeable stock of

acquired assets and the forthcoming reinvestments, and our forward guidance on

policy interest rates."

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

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