FRANKFURT Feb 22 Weakness in euro zone price
pressures has extended to the medium-term, the time horizon the
European Central Bank looks at when deciding on policy, ECB
policymaker Peter Praet said.
Praet, who holds the powerful economics portfolio on the
ECB's Executive Board, told Portuguese newspaper Expresso: "If
our mandate is at risk, we will act without hesitation".
The ECB's mandate is to deliver price stability, which it
defines as inflation of close to but below 2 percent over the
medium-term. Euro zone inflation is running at just 0.7 percent
- well below the target.
"We do not see a risk of deflation, but we admit that the
pressures on prices are weak, and that this weakness in price
development is extending to the medium-term," Praet said in the
newspaper interview, conducted on Feb. 18.
The ECB holds its next policy meeting on March 6.
"When we issued our forward guidance last November, we
communicated that we will continue to have a very loose monetary
policy and we will do whatever is necessary to fulfill our
mandate," Praet added.
"We are therefore very aware of what you are referring to,
i.e. that low price pressures have extended to the medium term.
Let's make this assessment in March."
(Writing by Paul Carrel; Editing by Sonya Hepinstall)