President Mario Draghi:

ECB ready to ramp up asset purchases 'without delay'

GMT 12:09 2014 Friday ,21 November

Arab Today, arab today ECB ready to ramp up asset purchases 'without delay'

ECB President Mario Draghi
Frankfurt - Arab Today

European Central Bank President Mario Draghi said Friday that the ECB is ready to ramp up its contested asset purchases "without any undue delay."
"We will use all means available to us, within our mandate, to return inflation towards our objective -– and without any undue delay," Draghi told a banking congress.
"We would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases."
In a bid to ward off deflation in the euro area, the ECB has not only cut its interest rates to new all-time lows, but also embarked on a contested programme of asset purchases to pump liquidity into the financial system -- a move viewed critically by some observers, including the German central bank or Bundesbank as overstepping the ECB's mandate.
"With our monetary policy decisions in June and in particular in September, we have transitioned from a monetary policy framework based predominantly on passive provision of liquidity to a more active and controlled management of our balance sheet," Draghi explained.
"This means that it is now changes in the size and composition of our balance sheet that determine our monetary policy stance –- or to be more specific, the markets in which we intervene, and the magnitude and pace of our purchases. We expect such interventions to affect output and inflation," Draghi said.
Eurozone inflation currently stands at just 0.4 percent, way below the ECB's target of around 2.0 percent, fuelling concerns that the single currency area could slip into deflation, a dangerous downward spiral of falling prices.
"We cannot be complacent -– we have to be very watchful that low inflation does not start percolating through the economy in ways that further worsen the economic situation and inflation outlook," Draghi said.
Source: AFP

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