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No reason to discuss more rate hikes: Welteke

FRANKFURT: Bundesbank President Ernst Welteke said he sees no current reason to discuss further interest rate hikes but that could change quickly if inflationary pressure lasts, a newspaper reported.

Welteke said he sees no signs that high oil prices and the euro's current weakness would lead to a lasting pick-up in inflation, according to the summary of a report to appear in Monday's Financial Times Deutschland, released on Sunday. 0REUT 15:29 03-26-00

As head of the Bundesbank, Welteke sits on the European Central Bank's governing council. The ECB has cited inflationary dangers and raised interest rates twice in as many months with its key refi rate now at 3.50 percent.

Welteke said the 11-nation euro area had great growth potential but that, especially in Germany, it had not yet reached a strong, self-sustaining pick-up, according to the newspaper summary.

Turning to the inflation situation specifically in Germany, the largest economy in the euro area, Welteke said, "We observe now at the Bundesbank still no endogenous price pressures in Germany."

According to data released on Friday, higher oil prices and a weak euro currency drove German March inflation to an annual increase of 1.9 percent, its highest increase in two years, although analysts say that the rise will peak soon.

Analysts expect the ECB to raise rates further this year but disagree about the possible timing for a move.-Reuters