FRANKFURT: The European Central Bank will be able to gauge next year whether it needs to start buying sovereign bonds to help stimulate the eurozone economy, its deputy president said.
“During the first quarter of next year we will be able to gauge better” whether the ECB’s previous stimulus measures are working, the central bank’s number two, Vitor Constancio, said in a speech prepared for delivery in London. “If not, we will have to consider buying other assets, including sovereign bonds in the secondary market,” Constancio said.
In a range of measures to avert deflation — a downward spiral of falling prices — in the 18 countries that share the euro, the ECB has cut its key interest rates to new all-time lows and pumped unprecedented amounts of liquidity into the system.
More recently, it has started buying covered bonds and asset-backed securities with a view to increasing the size of its balance sheet in order to boost inflation in the single currency area. It has said it wants to bring its balance balance back to the size it had in early 2012, which would entail boosting it by around ¤1 trillion ($1.25 trillion) from its current level.
AFP
