FRANKFURT (Reuters) - The European Central Bank cut interest rates and expanded its quantitative easing asset-buying programme on Thursday to boost the euro zone economy.
Following are comments by ECB President Mario Draghi at a press conference after the bank’s policy meeting.
“The economic recovery in the euro area continues to be dampened by subdued growth prospects in emerging markets, volatile financial markets, the necessary balance sheet adjustments in a number of sectors and the sluggish pace of implementation of structural reforms.”
“Inflation rates are expected to remain at negative levels in the coming months and to pick up later in 2016. Thereafter, supported by our monetary policy measures and the expected economic recovery, inflation rates should recover further.”
CLOSELY MONITORING WAGES
“The Governing Council will closely monitor price-setting behaviour and wage developments in the euro area, paying particular attention to ensure that the current low inflation environment does not become entrenched in second-round effects on wage and price-setting.”
“The Governing Council expects key interest rates to remain at the present or lower levels for an extended period of time, and well past the horizon of our net asset purchases.”
NEED INFLATION TO RETURN
“While very low or even negative inflation rates are unavoidable over the next few months as a result of movements in oil prices, it is crucial to avoid second-round effects by securing the return of inflation to levels below but close to 2 percent without undue delay.”
DOWNSIDE GROWTH RISKS
“The risks to the euro area growth outlook remain tilted to the downside.”
“With today’s comprehensive package of monetary policy decisions, we are providing substantial monetary stimulus to counteract heightened risks to the ECB’s price-stability objective.”
“We expect the economic recovery to proceed at a moderate pace.”
“This comprehensive package will exploit the synergies between the different instruments and has been calibrated to further ease financing conditions, stimulate new credit provision and thereby reinforce the momentum of the euro area’s economic recovery and accelerate the return of inflation to levels below but close to 2 percent.”
Compiled by EMEA Desk
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