ECB should not 'overreact', says Vujcic

The European Central Bank should not “overreact” to euro-zone inflation edging below its 2% target as there are good reasons to believe it will come back up, ECB policymaker Boris Vujcic told Reuters.

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The ECB cut interest rates on Thursday for the eighth time in a year but signalled at least a policy pause next month, despite projecting inflation at just 1.6% next year. Inflation in the 20 countries that share the euro was 1.9% in May, according to a flash reading published last week.

Vujcic, who is also Croatia's central bank governor, said price growth was likely to bounce back later and that monetary policy should not try to do “precision surgery” on small fluctuations from its goal.