Reuters: US Dollar Report: UPDATE 1-ECB's Noyer says inflation expectations well-anchored

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-ECB's Noyer says inflation expectations well-anchored Dec 3rd 2012, 02:01 Sun Dec 2, 2012 9:01pm EST * ECB Noyer: global growth sluggish and fragile * Unconventional steps never imposed by governments * BOJ deputy gov calls for boosting growth potential By Leika Kihara TOKYO, Dec 3 (Reuters) - European Central Bank governing council member Christian Noyer said on Monday that he saw no reason currently to worry that a sharp increase in money pumped into markets by major central banks was inflationary, warning that global economic growth remained sluggish and fragile. "(The) expansion in central bank money has not affected inflation expectations, which have remained well-anchored," Noyer, who is also head of the Bank of France, said at a seminar in Tokyo. Central banks had "many tools" available to absorb liquidity when necessary, he said. Noyer also rebuffed ideas that central banks' independence could no longer be taken for granted after the global financial crisis in 2008, arguing that the non-conventional measures taken by major central banks were never imposed by governments. "In all countries, non-conventional measures and the consecutive expansion of balance sheets were a deliberate and voluntary response to financial market developments that threatened their integrity, their functioning and overall economic stability," he said. He also argued against criticism that the ECB's government bond purchases could be equivalent of monetising public debt, saying that the central bank is allowed under law to conduct such purchases from the secondary market. "There is no legal issue, here," he said in the largely academic seminar discussing lessons from Japan in dealing with the aftermath of the global financial crisis. Noyer, however, warned of the diminishing returns of central bank monetary loosening, saying that while central banks have been active and audacious, they "do not have unlimited power." Bank of Japan Deputy Governor Kiyohiko Nishimura, who also spoke at the seminar, said central bank should find tools to support their country's efforts to boost the economy's growth potential. "Monetary policy can influence growth potential, although (the effects) of such efforts are uncertain," he said. The BOJ has been under intense political pressure to take bolder action to beat deflation that has plagued Japan for more than a decade. Shinzo Abe, the head of a main opposition party set to win next month's general election, has called for "unlimited" easing to achieve 2 percent inflation and a possible revision to a law guaranteeing the BOJ's independence. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions