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To: UnBelievable who wrote (53359)	6/8/2000 9:19:00 AM
From: UnBelievable	Respond to of 99985

ECB Duisenberg: Price Stability Risk Has Increased 06/08/2000 08:32 AM Dow Jones News Services (Copyright ¸ 2000 Dow Jones & Company, Inc.) DJ ECB Duisenberg:Latest M3 Figures Confirm Liquidity Ample DJ ECB: Main Risks To Inflation From Forex, Oil Prices DJ ECB: Rate Hike Addresses Future Upside Price Risks DJ ECB: Recent Monetary Data Showed Upside Inflation Risk DJ ECB: Upside Inflation Risk Needed To Be Counteracted DJ ECB: Outlook For Growth Has Improved Markedly DJ ECB:Recent EUR Rise Shows Robust Econ Growth To Continue DJ ECB: Euro Area Exports Should Remain Strong DJ ECB: CPI Outlook Has Become Less Favorable DJ ECB:May Oil Price Rise Signals Short-Term Inflation Risk DJ ECB: Projected 2% CPI Through '01 Clear Warning Signal DJ ECB Urges Govts To Avoid Loosening Fiscal Policy DJ ECB Duisenberg -2: Saw Threats To Price Stability FRANKFURT (Dow Jones)--The European Central Bank saw medium-term upside risks to euro-zone prices and raised interest rates by 50 basis points to address that threat, President Wim Duisenberg said Thursday. The move was proactive and forward-looking, the ECB President said. "All inflationary forecasts have been revised upward, and this is the reason for concern," Duisenberg said. "The rate hike addresses the upside risk to price stability and will continue" to do so. (DJ ECB Noyer: New Variable Refi Not Fed-Type Target Rate DJ ECB Duisenberg -3: Comes After 50-Basis-Point Rate Hike Duisenberg said the upward price risks were reflected in recent monetary data. He said the ECB sees the main risks to inflation coming from the euro exchange rate and oil prices. Recent developments in monetary conditions "clearly pointed to upside risks if not counteracted," Duisenberg said. Duisenberg spoke to reporters shortly after the ECB announced a 50-basis-point rise in its three key interest rates. The ECB also announced Wednesday it will switch to a variable-rate refinancing tender from the fixed-rate system it uses now. It did so to help alleviate an overbidding situation at its refinancing tenders. The first tender will go ahead with a minimum base rate of 4.25%. Duisenberg noted the outlook for euro-zone CPI "has become less favorable." DJ ECB: 50-Basis Pt Rate Hike Clears Horizon For Some Time DJ ECB: Rate Move Not A Reaction To Forex Developments DJ ECB: "Grateful" If Rate Hike Helps Forex Sentiment DJ ECB: Hike Helps Sustained Non-Inflationary High Growth DJ ECB: Only ECB Can Speak For Day-To-Day Forex Moves DJ ECB:Consensus Rate Decision After Lengthy,Intensive Talk DJ ECB: Govts Should Use Extra Revenues To Cut Deficit,Debt Still Promote Growth, Not Stifle DJ ECB Duisenberg -4: Tightening Cycle May Have Peaked ECB Vice President Christian Noyer explained the shift to a variable-rate tender wasn't a move by the central bank to mimic the U.S. Federal Reserve system. The new variable main refinancing rate is not a target rate like that of the U.S. Federal Reserve, because these are technically different, Noyer said. This system "is closer to the one we wanted to have from the beginning," he said. While not directly signaling a shift in the ECB's monetary policy bias, Duisenberg indicated the 50-basis-point rise may be enough for a while. "One of the motions for a half-point move was that such a move would clear the horizon for some time to come," he said. Duisenberg said he wouldn't tie the ECB's rate decision to the euro's level. Thursday's move "is in no way a reaction to the exchange rate developments," he said. But, "if it helped change sentiment, we are only grateful for that," he said. Duisenberg was optimistic overall about the euro zone's economic performance and prospects. "Euro-area exports should remain strong," based on stronger-, faster- and broader-based economic growth globally," he said. The ECB president said the euro's recent appreciation "reflects expectations that robust economic growth will continue" and that euro-zone liquidity remains ample, as reflected by recent M3 money supply figures. But Duisenberg cautioned that euro-zone governments need to keep fiscal policies tight and to stay the course of structural reform. DJ ECB: Stance Still Accommodative But Less Than Before DJ ECB: Recent Rate Moves Prevent Exceeding 2% CPI Limit DJ ECB: Euro Still Has Potential To Appreciate DJ ECB: Euro Depreciation Trend Seems To Have Reversed