The President said the ECB forecast “limited” risks yet things could change in the long term, hence Frankfurt will “monitor developments very closely” and “will act swiftly if required.”
No immediate action on interest rates by the ECB, yet “The Governing Council is unanimous in its commitment to using also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation,” said President Mario Draghi during the press conference following the Governing Council meeting. Draghi promised that the ECB “will monitor developments very closely” and “will consider all instruments available,” given that it is “resolute in its determination to maintain a high degree of monetary accommodation and to act swiftly if required.”
That is why the ECB, even though it “firmly reiterates that it continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time,” it does not “exclude further monetary policy easing.”
According to the ECB analysis, real GDP in the euro area rose by 0.2%, quarter on quarter, yet “developments in global financial markets and in emerging market economies, as well as geopolitical risks, may have the potential to affect economic conditions negatively,” warned President Draghi.
Currently, the ECB sees both upside and downside risks to the outlook for price developments as limited and broadly balanced over the medium term, but “the Governing Council is unanimous in its commitment to using also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation,” added President Draghi.
His words seemed to convince the markets – a +1 percent was immediately registered, with the BTP-Bund spread down to 165 from 169.
