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ECB's Bonnici warns on impact of oil on inflation

Tuesday, January 12, 2016 - 17:28
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The European Central Bank must continuously evaluate the effect of its money printing programme, a policy setter said on Tuesday, adding that while the falling price of oil lifted buying power, it hurt price growth.

[PARIS] The European Central Bank must continuously evaluate the effect of its money printing programme, a policy setter said on Tuesday, adding that while the falling price of oil lifted buying power, it hurt price growth.

"The oil price fall has some positive impacts through raising the purchasing power of euro zone households and this reinforces the asset purchase programme," Josef Bonnici, the governor of the Central Bank of Malta said.

"There is also an impact on inflation, not in the desired direction, so there is some degree of offsetting between these factors," said Mr Bonnici, who also sits on the ECB's Governing Council.

REUTERS