FRANKFURT, July 20 (Reuters) - The European Central Bank left its benchmark refinancing rate unchanged at 0.00 percent, as expected, on Thursday. President Mario Draghi also said the ECB would continue its monthly asset purchases at the current rate, 60 million euros a month, until December 2017 or beyond, if necessary. Following are highlights of ECB President Mario Draghi’s comments at a post-policy meeting press conference. ON POTENTIAL CHANGES TO THE ASSET-PURCHASE PROGRAMME ”.. We need to be persistent and patient because we aren’t there yet.
“We also were unanimous in communicating no change to the forward guidance and also we were unanimous in setting no precise date for when to discuss changes in the future - in other words, we simply said that our discussions should take place in ... the autumn.” ON WHAT THE ECB MIGHT DO IN SEPTEMBER We haven’t discussed what we’re going to do in view of September or even less so what we’re going to do after September. It was a unanimous conclusion - don’t set dates.
We need to think, we need to have lots of information ... there is a lot of uncertainty around. So the Governing Council doesn’t want to be forced to take decisions in an absence of full information.
ON AUTUMN DISCUSSIONS ON QE That is exactly why we having the discussion in the autumn and why we didn’t want to set the precise date, because we have to have all the available information at that point in time - which we will have by then.
It’s going to be a discussion made up of different parts ... first and foremost we have to look at the path of inflation, whether it converges in a sustainable and self-sustained manner to our objective.
ON THE (SLOW) RESPONSE OF WAGE GROWTH TO LABOUR MARKET The conclusion we drew is that in the end, yes, we will go back to a relationship like we had before the crisis ...
I focused on the labour market, but there are other reasons why this response may be delayed. For example, the de-leveraging process is another reason why this may be slower than you would have in normal times ...
All throughout we are confident, we are moving through. It’s a combination of confidence and prudence and patience.
BUYING GREEK GOVERNMENT BONDS First of all the third (bailout) review must be completed. The Greek government had decided to tap the market and of course it’s up to the government to decide on this. The sound implementation of the programme and credibility are essential, however, for restoring market confidence. ... The way we see this is that issuance activity should be part of an overall strategy where you have the completion of the third programme and also the return to the market should be in a lasting way. So it’s premature to talk about other things.
‘WE STAND READY’ If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, we stand ready to increase our asset-purchase programme in terms of size and/or duration. OUTLOOK IMPROVEMENT Our assessment is that, what I’ve just said, in Sintra and Tallinn, because we have to go back to that - and the Q&A and the introductory statements - aren’t very different. On all occasions, what we did was basically take stock of the unquestionable improvement in the growth outlook in the euro area.
STEADY EXPANSION The incoming information confirms a continued strengthening of the economic expansion in the euro area, which has been broadening across sectors and regions. The risks to the growth outlook are broadly balanced.
RECOVERY ROBUST We are finally experiencing a robust recovery where we only have to wait for wages and prices to follow course to our objective. Now the last thing the Governing Council want is actually an unwanted tightening of the financing conditions that either slows down this process or may even jeopardise it.
SLOW STRUCTURAL REFORMS Economic growth prospects continue to be dampened by the slow pace of implementation of structural reforms ... The risks surrounding the euro area growth outlook are broadly balanced. On the one hand, the current positive cyclical momentum increases the chances of a stronger-than-expected economic upswing. On the other hand, downside risks primarily related to global factors continue to exist.
EXCHANGE RATE The repricing of the exchange rate has received some attention during the various exchanges and in various ways.
POLICY HELPING INFLATION CONVERGENCE PROCESS Our monetary policy measures have continued to secure the very supportive financing conditions that are necessary to make continuous progress towards a sustained convergence of inflation rates to levels below but close to 2 percent over the medium-term.
HEADLINE INFLATION Headline inflation is likely to remain around current levels in the coming months. GROWTH RISKS The risks to the growth outlook are broadly balanced.
NO STRONGER INFLATION DYNAMIC While the ongoing economic expansion provides confidence that inflation will gradually head toward levels in line with our inflation aim, it has yet to translate into stronger inflation dynamics.
UNDERLYING INFLATION Headline inflation is dampened by the weakness in energy prices. Moreover, measures of underlying inflation remain overall at subdued levels.
Compiled by Larry King