Draghi sees need to review monetary policy as downside risks increase

By FXStreet FXStreet (Mumbai) – The European Central Bank (ECB) today kept its monetary policy unchanged. Rates were held steady at 0.05 per cent and at the post meeting press conference ECB supremo Mario Draghi stated that rates can be expected to “stay at present or lower levels for an extended period of time”. He held that there that downside risks were increasing again. He signalled the need for more stimulus measures and that monetary policy stance will be reassessed in its next meeting on the back of rising downside risks. He noted “It will therefore be necessary to review and possibly reconsider our monetary policy stance at our next meeting in March”.

Defending December’s stimulus package which some investors thought was not enough Draghi said the policy measures were “entirely appropriate and effective” given the conditions that were prevailing then. In December the ECB had slashed deposit rate, extended QE to March 2017 and expanded it to buy chiefly government bonds and also decided to reinvest the principal payments on the securities purchased to support liquidity conditions. He highlighted the change that has come about post its December meeting owing to sharp decline in oil price which has fallen 40 per …read more

Source:: FX Street