ECB's Villeroy: ECB ready to adjust all instruments

Eren Sengezer FXStreet

The European Central Bank (ECB) is ready to just all of its instruments and policy options include a deposit rate cut if needed, ECB Governing Council member François Villeroy de Galhau said on Monday, as reported by Reuters.

Additional takeaways

"Recent eurozone inflation rise shouldn't be overstated, includes temporary factors."

"There is no risk of overheating in Europe."

"Should be ready to accept inflation above target for some time after past shortfall."

"Forward guidance could be strengthened to make tolerance for inflation overshoot explicit."

"So much as recent yield rise is unwarranted, ECB must react against it."

"The first tool is actively using the flexibility of our Pandemic Emergency Purchase Programme (PEPP) purchases."

Market reaction

The EUR/USD pair pushed lower after these remarks and was last seen losing 0.35% on the day at 1.2030.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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