tHE GOVERNOR oF tHE BANK oF FRANCE ALERT oN tHE IMPACT oF wEAK OIL PRICES
FRANKFURT (Reuters) – the European Central Bank (ECB) could inject more liquidity into the system financial eurozone, said Sunday the governor of the Bank of France (BoF) to a German newspaper, explaining that the weakness in oil prices was likely to have a long term negative impact on the economies of the region.
“The temporary fall in oil prices is not in itself a sufficient reason,” said Villeroy Galhau the Frankfurter Allgemeine Zeitung. “But if the low price of energy has long lasting effects, we must act. That seems to be the case but we will see in March.”
The Governing Council of the ECB must meet March 10 to discuss a possible change in policy rates and a possible further amplification of its asset purchase program to support the economy of the eurozone and boost inflation.
François Villeroy de Galhau added that it would be possible to increase the amount of redemptions in excess of € 60 billion a month being made.
“We are ready to act, but we must first see where are economic statistics,” he added.
The first estimate of inflation in the euro zone in February, a figure closely watched by the ECB before its March meeting will be published on Monday. Economists polled by Reuters expect that prices have stagnated over the past month compared with February 2015, after rising 0.3% year on year in January.
(John O’Donnell, Juliette Rouillon for the French service, edited by Marc Angrand)
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