ECB 'will do what is necessary' to tame inflation, Bank of France governor tells CNBC

The European Central Bank “will do what is necessary” to keep inflation on target, one of its top policymakers has told CNBC.

Speaking to CNBC's Lisa Kim in Singapore on Tuesday, Bank of France Governor Francois Villeroy de Galhau sought to reassure sovereign debt markets that central bankers in Europe were committed to minimizing the impact of the Iran war.

Spiking oil prices, a result of the effective closure of the Strait of Hormuz, have fueled concerns that an energy crisis could lead to a resurgence of inflation in various markets.

Villeroy de Galhau, who is a member of the ECB's Governing Council, added that European policymakers “will do what is necessary as an independent central bank to bring inflation back to target.”

“If I speak on behalf of the ECB, this means do what is necessary to bring inflation back to 2% in the medium term. Markets can be assured of that,” he told CNBC.

Europe is particularly vulnerable to energy shocks as a major net energy importer. Prices of gasoline, diesel and jet fuel have surged in recent months, prompting government intervention in some countries and warnings of flight cancellations over the summer.

Villeroy de Galhau told CNBC that there was a fear of inflation permeating financial markets, which was particularly visible in government bonds.

“The effect of the Middle East conflict is clear,” Villeroy de Galhau told CNBC. “In the short run, there are significant upward pressure first round effects due to energy prices, but it's our responsibility, I would even say our commitment to prevent second round effects.”