BERLIN, March 29 The euro zone is not in a
deflationary cycle and the European Central Bank should not
overreact to a fall off in inflation which is largely due to
cyclical factors which are likely to be temporary, Bundesbank
President Jens Weidmann said on Saturday.
The head of Germany's central bank, who is also a member of
the European Central Bank's governing council, said that about
two thirds of the falloff in euro zone inflation could be
attributed to energy and food prices.
"Monetary policy should respond to such factors only in the
event of second round effects," said Weidmann at a conference in
the German capital.
(Reporting by Patrick Graham and Reinhard Becker; writing by