ECB's Villeroy: Our inflation target must be flexible

The European Central Bank's (ECB) inflation target must be flexible, ECB Governing Council member Francois Villeroy de Galhau said on Thursday. "We must say how far and over what time horizon inflation can deviate from the target."

Regarding the policy outlook, Villeroy argued that a stabilisation of the monetary policy should follow if the current stabilisation of the economy is confirmed.  

The shared currency seems to be recovering its losses against the USD following these comments. As of writing, the EUR/USD pair was up 0.05% on the day at 1.1110.

"If our central inflation target is seen as a ceiling, we have less chance of meeting it," Villeroy added. "Our inflation target must be credible not only vis-a-vis financial markets but also households and companies."