Inflation conditional on ample monetary stimulus, ECB says

Inflation conditional on ample monetary stimulus, ECB says

Although the current situation in the Euro zone is good, a lasting return of inflation still depends on broad monetary support from the European Central Bank (ECB), the bank’s president, Mario Draghi, said on Monday at the European Parliament in Brussels. The evolution of inflation is fundamentally “conditional on an ample degree of monetary stimulus” from “all our monetary policy measures,” he said.

Since 2015, these measures entail purchases of public and private assets on the secondary market – amounting to over 2,300 billion euros to date – the reinvestment of bonds that have reached maturity so as to maintain the size of their stock in the Euro system central banks, and the stated intention to keep interest rates low for a good while yet.

The dynamic of the economy in the Euro zone has strengthened confidence in the prospects for inflation, but there is still a need to be “patient” and “persistent” on monetary policy for inflation to rebound in a lasting manner to the desired level of close to, but less than, 2%, Draghi said.

His statements came a few days before the next monetary policy meeting of the ECB, scheduled for the 8th of March in Frankfurt, during which the institution could finetune its judgement on medium-term inflation and growth ahead of its new macroeconomic forecasts.

The Brussels Times

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