BUDAPEST, Dec 7 (Reuters) - European Central Bank President Mario Draghi warned on Friday Hungarian politicians from trying to exert undue influence on the country's central bank.
'A key prerequisite for a credible monetary policy is the independence of the central bank,' Draghi said in the text of a speech to be delivered at a conference organised by the Hungarian central bank.
'The ultimate success of a central bank in maintaining price stability depends on its credibility.'
Draghi added that independence means that the central bank has to have the necessary means and instruments to achieve its price stability objective without being influenced by outside forces.
He also said that lowering interest rates in an indebted economy may risk foreign exchange rates falling, which in turn may lead to higher inflation and offset the impact of economic stimulus.
(Reporting by Krisztina Than/Gergely Szakacs) Keywords: ECB/DRAGHI
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