BERLIN, Dec 27 (Reuters) - Bundesbank chief and European Central Bank (ECB) Governing Council member Jens Weidmann has warned that although the euro zone’s current low interest rate is justified weak inflation does not give a licence for “arbitrary monetary easing”.
In an interview with German newspaper Bild made available on Friday Weidmann said: “The euro zone is recovering only gradually from the harshest economic crisis in the post-war period and there are few price risks. This justifies the low interest rate.”
“Low price pressure however cannot be a licence for arbitrary monetary easing and we must be sure to raise rates at the right time should inflation pressure mount.”
The ECB cut its main refinancing rate to 0.25 percent in November. (Reporting by Alexandra Hudson)