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Accommodative monetary policy still needed: ECB's Villeroy

Francois Villeroy de Galhau arrives at the Petruzzelli Theatre during a G7 for Financial ministers in the southern Italian city of Bari, Italy May 11, 2017. REUTERS/Alessandro Bianchi

PARIS (Reuters) - The European Central Bank has made progress steering inflation towards its two percent inflation target but loose monetary policy is still necessary, ECB policymaker Francois Villeroy de Galhau said on Wednesday.

Speaking to the finance commission of France’s lower house of parliament in his role as the head of the Bank of France, Villeroy said the ECB had defeated the risk of deflation even though inflation still remained far from the target.

“We have made progress, but we have not yet reached the target and so there is still a need for our accommodative monetary policy,” Villeroy said.

“We are adapting its intensity depending on the economic situation and progress towards the target,” Villeroy added.

Reporting by Yann Le Guernigou and Leigh Thomas; Editing by Andrew Callus