MNI: ECB's Weidmann Again Criticises the Bank's Bond Purchases

By Christian Vits

     FRANKFURT (MNI) - Bundesbank President Jens Weidmann on Friday reiterated

his criticism over the European Central Bank's bond purchases and warned that

the current robust economic development will lead to higher inflation.

     "The development of domestic price pressures shown in the ECB's projections

stands in line with a path towards the ECB's definition of price stability,"

Weidmann said in a speech in Rottach-Egern, Germany. 

     "The envisioned inflation rate of below but close to two percent mustn't be

reached immediately and at any cost, this leaves some leeway in times, when this

takes a bit more time for good reasons," he added.

     Weidmann underlined that the ECB in the meantime has become the biggest

creditor of the currency bloc's member states. He labelled the government bond

purchases as an "emergency instrument" to fight a deflation. 

     "But this risk has completely disappeared," he said.

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

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

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