FRANKFURT (MNI) - Former U.S. Federal Reserve Chairman Paul Volcker told a German newspaper in an interview published Monday that he rejects the notion of increasing central banks' inflation targets.

Asked by Germany's Frankfurter Allgemeine Zeitung to comment on the proposal of a paper published by the International Monetary Fund that central banks should allow higher inflation so the real cost of public debt will fall, Volcker retorted that the idea "is simply nonsense."

FRANKFURT (MNI) - The European Central Bank said Monday that a total of E39.625 billion Eurosystem covered bond purchases had settled as of March 7.

As of March 4, settled acquisitions had totaled E39.555 billion, the ECB said Friday. The ECB plans to buy a total of around E60 billion covered bonds by the end of June 2010 at the latest.

The program is aimed at revitalizing a market segment that has been exceptionally hard hit by the financial turmoil.

PARIS (MNI) - French economic growth is likely to slow in 1Q, even more than expected a month ago, as the industry upswing appears to be losing steam, the Bank of France said Monday, revising down its previous forecast for 1Q GDP growth by 0.1 point to 0.4%.

The national statistics institute, Insee, had also projected 1Q GDP growth of 0.4% last December. Growth in 4Q accelerated to 0.6% from 0.2% in 3Q.

BEIJING (MNI) - The People's Bank of China announced that it will sell CNY100 billion in one-year paper on Tuesday as part of its biweekly open market operations.

The volume compares with the CNY60 billion sold last Tuesday at a yield of 1.9264%.

It will mark the biggest sale of one-year paper since the CNY100 billion sold last October 13 and marks the latest increase in the size of PBOC open market operations as the central bank takes a more aggressive tack to tackling interbank market liquidity.

PARIS (MNI) - The following is the text of the overview of the Bank of France's February monthly business survey:

In February, industrial activity increased further in the majority of sectors, though at a more moderate pace than during the previous month.

The capacity utilisation rate continued to recover, while remaining below its long-term average. The ongoing improvement in order books brought them closer to a level deemed normal by business managers. Inventories of final goods appeared consistent with targeted levels.

By Brai Odion-Esene

WASHINGTON (MNI) - A majority of respondents to a prominent survey of U.S. economists believe mortgage rates will rise once the Federal Reserve completes its planned purchases of mortgage-backed securities, but most are not in favor of "explicit subsidization" of Fannie Mae and Freddie Mac, as it would not promote the long-term health of the mortgage market.

By Brai Odion-Esene

WASHINGTON (MNI) - A majority of respondents to a prominent survey of U.S. economists believe mortgage rates will rise once the Federal Reserve completes its planned purchases of mortgage-backed securities, but most are not in favor of "explicit subsidization" of Fannie Mae and Freddie Mac, as it would not promote the long-term health of the mortgage market.

FRANKFURT (MNI) - The European Central Bank will not eliminate major liquidity providing measures before circumstances allow it to do so, ECB Governing Council member Georgios Provopoulos said in an interview published Monday.

The head of the Greek National Bank told German business daily Financial Times Deutschland that Eurozone inflation would approach the ECB's definition of price stability in the coming years, meaning deflation is not a concern.

And fiscally troubled Greece would not need help, he said.