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ECB to discuss careful reduction of stimulus, not abrupt end: Nowotny
September 1, 2017 / 10:02 AM / 19 days ago

ECB to discuss careful reduction of stimulus, not abrupt end: Nowotny

ALPBACH, Austria, Sept 1 (Reuters) - The European Central Bank will discuss how to initiate a careful withdrawal from its asset purchase programme, rate-setter Ewald Nowotny said on Friday.

Speaking to reporters on the sidelines of a conference, Nowotny added that he would not over-interpret recent gains in the euro against the dollar.

“The question is not whether we should hit the brakes (on the programme) abruptly,” Nowotny said about the ECB’s 2.3 trillion asset purchases, which are set to run until the end of the year. “But it’s how to initiate normalisation carefully. This is the sensible discussion.”

Nowotny sits on the ECB’s Governing Council and heads Austria’s central bank.

The ECB meets next Thursday and promised to decide this autumn whether to prolong the bond buys or start winding them down.

Regarding the common currency’s 13 percent rise against the dollar this year, Nowotny said: “I would not over-interpret or dramatise this development”.

He said it was realistic for Austria’s economy to grow by 2.8 percent this year, a significant upgrade compared to the Austrian central bank’s June forecast for 2.2 percent. (Reporting by Kirsti Knolle; Writing by Balazs Koranyi; editing by John Stonestreet)

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