European Central Bank policymakers are closely watching the unfolding crisis in the Middle East, policymaker Gabriel Makhlouf said today, adding that it was too early to assess the impact on economies.
"My view on that is that it's far too early to tell what the consequences are going to be," Makhlouf, a member of the ECB Governing Council and governor of the Central Bank of Ireland, said.
He made his comments after a meeting in Nicosia with Makis Keravnos, the Cypriot finance minister.
"We are watching developments very closely because they are bound to have economic implications for us to some extent," he said.
"It doesn't necessarily automatically mean it's going to have a significant effect that affects monetary policy, for example. I think we will just have to wait to see exactly what happens," he added.
Oil prices rose today, recovering from some of the previous day's losses as investors remained on edge about the possibility of a spillover from the crisis.
The island of Cyprus, the closest EU member state to the conflict, has been used as a hub by Western governments to evacuate their nationals away from violence threatening to engulf the region.
"This is of course firstly, and most importantly, a human tragedy," said Makhlouf, on a two-day working visit at the invitation of his Cypriot counterpart, Constantinos Herodotou.
In September, the ECB raised its key interest rates by 25 basis points, taking the deposit rate to 4% and the refinancing rate to 4.5%, but signalled its 10th increase in a 14-month-long streak was likely to be its last for now.
Inflation in the euro zone has been on a downward trajectory,but coming in at 4.3% in September it was still double the 2% ECB target.
