ECB's Villeroy: Need to remain alert and agile in next meetings

European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Thursday that need to remain alert and agile in all of their next meetings, per Reuters.

Key takeaways

"Return to normal monetary policy is a very positive step; nevertheless, in still abnormal times, it does not necessarily mean an end to the journey."

"We will monitor closely the possible spillovers of energy prices."

"If ever consequences from energy price volatility are lasting and propagating, we could possibly adapt our monetary policy."

"We have to react to dynamics that risk pushing inflation off target: what matters is whether a deviation from target is more likely to increase or to decrease."

"If required, it is not compulsory to go in incremental steps."

"Waiting too long for events to materialize can result in substantial losses."

"Inflation expectations do not so far reflect a risk of lasting spillover."

"A 10% appreciation in the Euro would broadly compensate the inflationary effect of a possible 10 Euro increase of the oil price."

"Barring a major exogenous shock, including possible new military developments in the Middle East, if monetary policy were to move in the next six months, it could be more in the direction of accommodation."

Market reaction

EUR/USD stays in its tight daily range below 1.1500 following these comments.