FRANKFURT: The European Central Bank has no intention of altering eurozone interest rates for the time being, as economic conditions remain weak, two of the bank’s highest officials said yesterday.
“The overall economic outlook still warrants an accommodative stance and an exit is still distant,” ECB chief Mario Draghi told a congress in Berlin.
At its regular policy meeting earlier this month, the ECB held its key rate unchanged at a current record low of 0.5 percent.
At the time, Draghi said the bank stood “ready to act to given the eurozone economy a much-needed shot in the arm.
Another top ECB official, executive board member Benoit Coeure, also ruled out Tuesday any possible rise in rates any time soon.
“Let me state quite clearly that I do not intend to drop any hints about a change in the monetary policy stance in the euro area in the near future,” Coeure told an investors’ conference in London.
“A reversal would not be warranted by current economic conditions,” he said.
Area-wide economic growth was projected to remain weak this year and inflation was expected to remain clearly below two percent.
“The various non-standard measures that have been introduced by the ECB to support monetary policy transmission in certain market segments will stay in place as long as necessary, and there are other measures, standard and non-standard, that we can deploy if warranted,” Coeure said.
“Therefore, at the current juncture, there should be no doubts that our ‘exit’ is distant and our monetary policy is and will remain accommodative,” he said.
Last week, US Federal Reserve chief Ben Bernanke signalled a possible end to the US central bank’s bond-buying programme later this year.
But Draghi said the ECB’s own bond purchase programme, known as Outright Monetary Transactions or OMT, had become more essential than ever.
“Because of OMT, the euro area is a more stable and resilient place to invest in than it was a year ago,” Draghi said.
AFP
