Daily Management Review

Amid Persisting Low Inflation, ECB Should Review Its Policy: Rehn


Rehn gives his view on what should be ECB’s next course of action vis a vis inflation targets.

Source: flickr.com; (CC BY 2.0)
Source: flickr.com; (CC BY 2.0)
On Wednesday, 29 May 2019, talking to Reuters, the Bank of Finland’s Chief, Olli Rehn, said that the European Central Bank needs to reconsider its “monetary policy strategy” besides loosening up how it defines “price stability”.
The developed world has been facing persistent “low inflation”, whereby prompting debates about the policy of central bank and its effectiveness in delivering on inflation targets.
According to Rehn, he wouldn’t consider changing the mandate of the European Central Bank; instead he would have examined the “definition of price stability”.
In his words:
“My view is that 2% is not a ceiling and inflation can deviate in both directions”.