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ECB's chief economist stands by pledge of keeping policy easy - Il Sole
March 24, 2017 / 7:45 AM / 9 months ago

ECB's chief economist stands by pledge of keeping policy easy - Il Sole

FRANKFURT, March 24 (Reuters) - The European Central Bank’s chief economist stood by the ECB’s pledge to keep its policy easy in a newspaper interview published on Friday, after comments by other rate-setters raised questions about the bank’s next moves.

The ECB has said it would keep buying bonds until at least the end of the year and keep interest rates at current record low levels or even cut them until “well past” that point.

“Our forward guidance has served us well and led to financial conditions that are appropriate,” Peter Praet told Il Sole 24 Ore.

“We reiterated it. We had no discussion on sequencing in the Governing Council.”

Austrian governor Ewald Nowotny said the ECB would decide at a later time whether to raise rates before or after its bond-buying programme comes to an end. His Italian peer Ignazio Visco said the time between the end of the purchases and the first rate hike could be shortened.

“We do not give a date for when that will be,” Praet said. “The Governing Council will decide in due course how long that ‘well past’ will be.”

Praet also emphasised slow wage growth and said the ECB would have to be “patient”.

“Wage evolutions...may reveal that there is more slack in the euro area labour markets than unemployment rates show,” Praet said.

“We have to be patient.” (Reporting By Francesco Canepa; Editing by Hugh Lawson)

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