FRANKFURT (Reuters) - It is clearly not yet time for the European Central Bank to stop pursuing accommodative monetary policies, even as inflation is moving towards its target, French central bank chief Francois Villeroy de Galhau said on Wednesday.
Still, ECB policy is not predetermined based on a split between doves and hawks, so it will evolve based on economic circumstances, Villeroy, who sits on the ECB’s Governing Council, told a business conference in Frankfurt.
“We are reasonably confident that both headline and underlying inflation will converge, close to our target in 2019,” Villeroy said.
“Given this progress, should we stop pursuing an accommodative monetary policy? At this stage, the answer is clearly no,” Villeroy added.
After years of unprecedented stimulus, the ECB is now facing calls to tighten policy, especially as inflation is rising sharply on the back of rebounding energy costs.
But the ECB has pushed back on critics, arguing that the inflation spike is only temporary and its super easy policies, including negative rates and trillions of euros worth of asset buys, are still necessary to achieve lasting inflation.
Reporting by Balazs Koranyi and Francesco Canepa