March 14, 2018 / 8:59 AM / in 7 days

ECB will need more specific policy guidance: Praet

FRANKFURT (Reuters) - The European Central Bank will need to make its policy guidance more specific as the current formulation will lose its effectiveness over time, ECB Chief Economist Peter Praet said on Wednesday.

FIL PHOTO: European Central Bank Executive Board Member, Peter Praet, speaks during a conference in Sofia, Bulgaria May 24, 2017. REUTERS/Stoyan Nenov

“With the passage of time, the indication that policy rates will remain at their present levels well past the end of net asset purchases will gradually cease to provide sufficient guidance about the likely evolution of the monetary policy stance,” Praet said.

“So, our forward guidance on the path of our policy rates will have to be further specified and calibrated as appropriate for inflation to remain on the sustained adjustment path towards levels below, but close to, 2 percent over the medium term,” Praet told a conference.

Reporting by Balazs Koranyi; Editing by Catherine Evans

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