(NICOSIA) - Cyprus will benefit from its entry into the eurozone thanks to the policies of the European Central Bank, ECB president Jean-Claude Trichet said in Nicosia on Friday.

"Cyprus will benefit from the stability-oriented policy of the ECB, which helps anchor inflation expectations," Trichet said during a ceremony at the central bank to celebrate Cyprus's adoption of the euro on January 1.

Congratulating the Cypriot authorities on the changeover, which he said "has been going smoothly," he warned that the "conversion of prices into euros should not be an opportunity to make unjustified price rises.

"This is especially important considering that food and energy prices are already exerting upward pressure on inflation in the euro area as a whole," Trichet said.

The ECB president said that "in order to fully reap the advantages of the euro ... wage settlements need to remain moderate" and "the indexation mechanism for wages and for some social benefits should be reviewed in order to reduce risks associated with inflation inertia and losses in competitiveness."

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