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ECB's Visco says new stimulus was necessary to counter deflation risk

ECB's Visco says new stimulus was necessary to counter deflation risk
FILE PHOTO - Bank of Italy Governor Ignazio Visco speaks to reporters during the G20 Finance Ministers and Central Bank Governors Meeting in Fukuoka, Japan June 9, 2019. Franck Robichon/Pool via REUTERS -
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MILAN (Reuters) – European Central Bank policymaker Ignazio Visco said on Saturday recent expansionary measures agreed by the bank were necessary to counter the risk of a return to deflation in the euro area.

“We must counter the significant risk that the economic slowdown and the low level of inflation translate into a permanent reduction in inflation expectations or a re-emergence of the threat of deflation,” Visco said during a conference.

At its Sept. 12 monetary policy meeting, the ECB decided to resume asset purchases designed to loosen monetary policy, a decision opposed by a third of the policymakers.

(Reporting by Giulio Piovaccari; Editing by Gareth Jones)

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