FILE PHOTO: A vendor receives a five Euro banknote from a customer at the central market in Athens, Greece, January 8, 2015. (REUTERS Photo/Christian Hartmann, File Photo
FRANKFURT (Reuters) – The impact of exchange rate changes on inflation has declined, and its impact on euro area consumer prices has been close to negligible, the costs of research of the European Central Bank, suggested on Tuesday.
Having lower its inflation target for the past seven years, the ECB has kept monetary policy unusually loose, in the face of some of the charges, as well as U. s. president, Donald Trump, and that he was seeking an unfair trade advantage, with a weak currency.
While the weakening of the euro that there is increase in import prices, and the impact on the bank’s key measure, the so-called harmonized index of consumer prices (HICP) is almost insignificant, ” the ECB said.
“1% of the depreciation of the euro raises the total import prices in the euro area and its member countries, on average, about 0.30% in a year,” the ECB said in an article in the Bulletin.
“Around the same time, the title of the HICP rises by about 0.04%, although the estimates are not always significantly different from zero,” he added, noting that these figures are lower than many previous estimates.
The paper added that its estimates for the exchange rate pass through to consumer prices, are not “statistically significant” for the years that he has studied.
The ECB targets inflation at just below 2%, but is now faced with the prospect of positive growth of the price of a drop in oil prices.
Reporting by Balazs Koranyi; Editing by Hugh Lawson