Trichet says ECB keeping all options open, stability risks 'balanced' UPDATE
Thursday, May 6, 2004 3:32:16 PM
afxpress.com
(Updates with Trichet comments on US Fed, growth and inflation outlook, oil prices)
HELSINKI (AFX) - European Central Bank President Jean-Claude Trichet said the bank does not have a bias in its monetary policy stance and is keeping "all options open" with regard to interest rates
Trichet also told a news conference here, following the ECB's decision to keep its key rate unchanged at 2.0 pct, that the bank currently considers the risks to price stability in the euro zone to be "balanced"
"We keep all our options open and we have absolutely no bias," he said in reference to the ECB's monetary policy
"The risks to price stability are balanced," he said
Asked about the US Federal Reserve's mild tightening bias, Trichet said: "Each central bank is following its own policy in its own environment, and all environments are different. As regards our position, I made absolutely clear that we didn't change our previous assessment, namely that we keep all our options open. We have no bias." "What happened in the US, or what happens everywhere else in the world, didn't change our assessment," he said
Questioned about whether the ECB has altered its outlook for growth in the euro zone as a result of the rise in oil prices, Trichet said the bank continues to integrate all available data and information, but has not changed its outlook from a month ago. "We have exactly the same analysis as regards the balance of risks, and therefore the conclusion, as we had a month ago," he said
Trichet said the outlook for global growth has not changed in light of the surge in oil prices
"At a global level... the overall consensus is that we are experiencing an episode of rapid growth... and this diagnosis has not changed with the most recent events." "The present level that we have observed in the last weeks of commodity prices and the price of oil, doesn't change at all the assessment of global growth being very robust," he said
In terms of the inflation outlook, Trichet said that the ECB expects a "hump in inflation in the months to come," primarily due to base effects
"We are observing it already now. We probably will have perhaps inflation over and above 2.0 pct, but at this stage this doesn't change our diagnosis... that inflation and price stability is in line with our definition, that inflation is in control over the medium term," he said
"We of course derive from that observation and this diagnosis that it is not appropriate to change our monetary policy stance, and we will see when the time comes whether we'll change anything." He said it was "clear that oil prices are exerting an influence", but added they are also "very volatile"
"It doesn't hamper in any respect our analysis or confidence that inflation is under control. Our diagnosis is clear, and it incorporates the price of commmodities and the price of oil." He reiterated his call for OPEC to exercise "responsibility" with regard to the price of oil
"I have already said that I was expecting myself... that the partners that have influence on the price of oil would exercise their own responsibility with a great sense, precisely, of responsibility, because it is a matter of importance."
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