ECB Eyes Risks of Inflation Below and Above Goal, Villeroy Says.

EUROPEAN Central Bank; ECONOMIC statistics; INTEREST rates; MONEY market; PRICES; INFLATION targeting

The European Central Bank (ECB) must be cautious about both undershooting and overshooting its inflation target as it gradually reduces interest rates, according to Bank of France Governor Francois Villeroy de Galhau. Unlike the US, the ECB does not have a dual mandate for prices and employment, but it does have a symmetric mandate around its 2% target. Villeroy's comments come after the ECB recently lowered its deposit rate by 25 basis points, but did not provide clear indications on future moves. The extent to which economic growth affects price pressures will be a determining factor in the ECB's future actions. [Extracted from the article]

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