5 Dec 2013
ECB's Draghi: Recent data proves rate cut in November fully justified
FXstreet.com (Łódź) - Following the reduction of the main interest rate by 25 basis points to 0.25% in November, the ECB Governing Council decided to keep it unchanged this month.
During the subsequent press conference, ECB head Mario Draghi reminded about deflation risks in the Eurozone, saying that inflation in the area could remain low for a prolonged period of time, before gradually returning to the ECB´s target level of 2%. Therefore, the monetary policy stance will be kept accommodative for as long as necessary and the central bank will continue with all the available instruments.
ECB's GDP forecast for 2013 remained unchanged at -0.4%. It expects growth of 1.1% in 2014, compared with the previous prediction of a 1% rise in 2014 and a 1.5% increase in 2015. The central bank warned however that but warns risks remain on the downside.
As far as inflation is concerned the ECB expects HIPC to rise by 1.4% in this year, by 1.1% in 2014 and by 1.3% in 2015, all lower than previous forecasts.
During the Q&A part of the press conference the ECB head signaled that the executive board was still discussing the possibility of releasing minutes from the monthly monetary policy meetings. He also said that native deposit rates were considered briefly.
During the subsequent press conference, ECB head Mario Draghi reminded about deflation risks in the Eurozone, saying that inflation in the area could remain low for a prolonged period of time, before gradually returning to the ECB´s target level of 2%. Therefore, the monetary policy stance will be kept accommodative for as long as necessary and the central bank will continue with all the available instruments.
ECB's GDP forecast for 2013 remained unchanged at -0.4%. It expects growth of 1.1% in 2014, compared with the previous prediction of a 1% rise in 2014 and a 1.5% increase in 2015. The central bank warned however that but warns risks remain on the downside.
As far as inflation is concerned the ECB expects HIPC to rise by 1.4% in this year, by 1.1% in 2014 and by 1.3% in 2015, all lower than previous forecasts.
During the Q&A part of the press conference the ECB head signaled that the executive board was still discussing the possibility of releasing minutes from the monthly monetary policy meetings. He also said that native deposit rates were considered briefly.