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4 Feb 2015
No Risks Of Deflation At The Moment – ECB Weidmann
FXStreet (Mumbai) - In an interview with German business magazine VBW, European Central Bank (ECB) Governing Council member Jens Weidmann said that the risks of the recently unveiled QE framework outweigh its benefits and that he doesn't Euro area slipping into a dangerous deflationary spiral as of now.
ECB Weidmann noted,
"Dangerous deflation would be characterized by a downward spiral of falling prices, declining wages, consumer restraint and reduced investment by companies,"
"We don't see such a development at the moment, and it is also not very likely for the future,"
Speaking further, he said that the QE program - announced on the bank's rate-setting conclave meeting on January 22 - is not a "normal monetary policy instrument", diverting from the official bank's statement.
ECB Weidmann noted,
"Dangerous deflation would be characterized by a downward spiral of falling prices, declining wages, consumer restraint and reduced investment by companies,"
"We don't see such a development at the moment, and it is also not very likely for the future,"
Speaking further, he said that the QE program - announced on the bank's rate-setting conclave meeting on January 22 - is not a "normal monetary policy instrument", diverting from the official bank's statement.