ECB determined to keep easy money policy
April 4, 2014, 12:10 am TWN
FRANKFURT -- The European Central Bank is determined to maintain eurozone easy-money policies and will take rapid action if needed, bank president Mario Draghi said on Thursday after the bank held rates low.
The bank “remains resolute in our determination” to keep monetary conditions in the euro area accommodative and will “act swiftly” if necessary, Draghi said amid concerns about possible deflation.
“We do not exclude further monetary easing,” Draghi told a news conference after the ECB held its key interest rates steady at all-time lows for the fifth month in a row.
While Draghi “does not see any deflation risks” at present in the 18 countries that share the euro, he said there was no cause for complacency.
And in its determination to keep deflation at bay in the eurozone economy and the recovery on track, the ECB was prepared to use not just conventional monetary policy tools such as interest rates, but also non-standard measures as well, Draghi said.
These included so-called quantitative easing, he said.
“The governing council is unanimous in its commitment to using also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation,” Draghi said.
The ECB also takes exchange rates into account when setting interest rates, but has no firm target for the euro-dollar, Draghi said.
“The exchange rate is very important for price stability,” but it is “not a policy target,” Draghi said.