MNI POLICY: ECB Inflation Symmetry Over Short-Term: Rehn

By Les Commons

     HELSINKI (MNI) - Eurozone inflation may vary around the 2% level in the

short-term to enable hitting target over time, Bank of Finland Governor Olli

Rehn said Monday, highlighting recent comments from European Central Bank

Governor Mario Draghi, who pointed to a symmetric approach.

     Rehn, hosting a conference on Monetary Policy and the Future of The Euro,

again posited that now may be the right time for the ECB to review its policy

framework.

     --Other key points from Rehn's opening remarks

     Looking ahead, the Governing Council stands ready to adjust all of its

instruments, as appropriate, so that inflation continues to converge towards our

inflation aim in a sustained manner.

     --In the longer view, the ECB now operates in a new environment where

long-run trends, such as population aging, lower long-term interest rates and

climate change have become key policy issues. 

     -- Central bankers must better understand the implications of these drivers

for growth, employment and inflation dynamics to deliver more effectively within

their mandates. Several central banks, including the Federal Reserve, are

currently reviewing their monetary policy frameworks.

     -- Rehn noted pertinent arguments for the ECB to review its framework now.

Monetary policy is carried in an economic environment that looks very different

from that of 16 years ago, when the ECB last reviewed its strategy, he noted.

Secondly, monetary policy is undertaken with very different tools from those of

16 years ago. And thirdly, it is a good practice to periodically review the

framework with policy academics and practitioners.

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

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