January 31, 2018 / 11:01 AM / 10 months ago

ECB tapering of asset buying not "existential question": Villeroy

DUBLIN, Feb 2 (Reuters) - The European Central Bank is normalising policy and whether it ends asset buys in September or winds them down gradually is not an existential question, French central bank chief Francois Villeroy de Galhau said on Friday.

“One shouldn’t focus excessively on the sole instrument of monthly net asset purchases: whether we end them in September or taper them somewhat more gradually is not a deep existential question,” Villeroy said in Dublin.

“We will rely more and more on the entire policy package, including the sizeable stock of acquired assets, the forthcoming reinvestments and the forward guidance on interest rates,” Villeroy, who sits on the ECB’s Governing Council added.

He added that normalisation will follow a predictable sequence with the ECB also keeping an eye on how exchange rates develop, with the recent dollar weakness considered a source of uncertainty.

The ECB’s 2.55 trillion euro ($3.17 trillion) bond buying programme, aimed at reviving inflation, is due to expire at the end of September, and financial markets are betting that purchases will end sometime in the fourth quarter after a brief taper. ($1 = 0.8035 euros) (Reporting by Padraic Halpin; Writing by Balazs Koranyi; Editing by Peter Graff)

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