* ECB's Trichet says lower oil may curb inflation, aid GDP
* Keeps door open on decision at next month's policy meeting
* 2 other ratesetters show continued concern over inflation
* Nowotny says short-term oil moves won't affect policy
(Adds background on euro zone growth)
By Paul Carrel and Ritsuko Ando
HELSINKI, May 6 Euro zone central bankers
welcomed a plunge in oil and commodities prices on Friday,
saying it could cool inflation, but gave no sign they would
change their determination to tighten monetary policy this year.
"The fall in the price of oil and commodities is good to
take for all reasons, certainly for inflation, not only
immediately but with the danger of second-round (effects) in the
medium run," European Central Bank President Jean-Claude Trichet
Trichet, speaking at an international conference of central
bankers in Helsinki, was referring to the risk that high oil
prices could create pressure for inflation to rise by boosting
wage demands across the economy.
"It is also good to take in terms of consolidating the
recovery because any increase in the price of oil and
commodities has an inflationary impact and a depressive impact
(on growth)," Trichet told CNBC television. [ID:nWEA9322]
Oil prices sank 5 percent on Friday, extending Thursday's
10 percent crash. Some traders said concern about a possible
slowdown of the global economy had helped to trigger panic
selling in the commodities markets. [ID:nLDE7450WK]
But in an interview with Reuters Insider television, Trichet
gave no sign that the ECB would change its intention to tighten
policy gradually this year. Last month it raised interest rates
for the first time since July 2008, and markets expect a further
two hikes this year.
"We have a new rendezvous in our next meeting (in June),
where we will have the new projections, have a wrapup of all the
new data. We will observe what we have to do at that time,"
Trichet said. [ID:nLDE7450Y9]
For the Reuters Insider interview with Trichet, click:
Central banker remarks at the conference: [ID:nLDE7450AV]
Two other members of the ECB's 23-member Governing Council
indicated in Helsinki that the central bank still felt its main
worry was not tightening policy fast enough.
On Thursday, an ECB policy meeting decided to keep interest
rates unchanged this month, and some investors interpreted a
news conference by Trichet as suggesting the ECB's next rate
hike might come only after July.
But Austrian central banker Ewald Nowotny said on Friday
such an interpretation was wrong.
"I definitely think it is an over-interpretation. There can
be no idea about being dovish," he told reporters.
He also said two days of oil price falls were not enough for
the ECB to change its view, because the central bank based its
policy on medium-term trends.
"We look at this in a medium-term perspective, not in the
short term...I'm not in the business of making forecasts for oil
prices," Nowotny said.
Athanasios Orphanides, governor of the Bank of Cyprus, said
inflation could become much more damaging in the long term if
policymakers were too optimistic about how fast economies could
grow without becoming unstable.
"Monetary policy can inadvertently stay too easy for too
long following a recession, risking generating inflation that
may be much harder to control if it is recognised too late."
Recent economic data in the euro zone have not pointed to
any major economic slowdown, and certainly not one that might
produce a long-term downtrend in commodities prices.
Euro zone retail sales dropped sharply in March but the
Markit Eurozone Services Purchasing Managers' Index, which
measures changes in activity of companies ranging from banks to
restaurants, fell only slightly in April from a near four-year
high, and remained firmly in expansionary territory.
Data due next Friday is expected to show the euro zone's
economy grew 0.5 percent in the first quarter of this year, a
modest step up from the lacklustre 0.3 percent expansion of the
previous quarter EUGDPQ.
Markit, a consultancy, said the latest PMI figures were
consistent with quarterly growth of around 0.8 percent for the
second quarter of this year.
(Writing by Andrew Torchia; Editing by Ruth Pitchford, John