Bundesbank president Axel Weber said the euro zone still faces inflation risks despite the recent decline in oil prices. There is no guarantee that the downturn in oil prices will last, he said in a speech. "This is why it is premature now to bank on a sustained easing of inflationary risks," said Weber, who is also a member of the European Central Bank's rate-setting governing council. He said the ECB would be likely to revise down its inflation forecasts if the oil price decline does last, but it is difficult to estimate the scale of such a revision at this stage. ECB staff are currently forecasting euro zone inflation of 2.4 pct in both 2006 and 2007. Euro zone inflation was 2.3 pct in August but it is expected to fall sharply in September as a result of the decline in energy prices. The ECB aims to keep inflation below but close to 2.0 pct over the medium term. "A policy which aims to maintain price stability over the medium term is more important than short-term volatility in oil and energy prices," said Weber. He said there is still a risk of "second round" effects on wages from the sharp rise in energy prices of the past two years. The ECB's monetary policy remains expansive, while money and credit growth is "clearly more dynamic than what is needed to finance non-inflationary growth", he said. "It is not without reason that (the ECB) is emphasising its strong vigilance" on inflation risks, he said Markets expect the ECB to raise interest rates again next week, taking its main refinancing rate to 3.25 pct from 3.00 pct.