FRANKFURT, April 26 (Reuters) - The European Central Bank kept policy unchanged on Thursday and ECB chief Mario Draghi was expected to play down worries over recent softness in the euro zone economy, leaving the door open to ending lavish bond purchases by the close of the year.
Following are highlights of ECB President Mario Draghi’s comments at a post-policy meeting news conference.
“We didn’t discuss monetary policy per se (at today’s meeting). So all Governing Council members reported on the situation of their own countries.”
“Convergence (of inflation to target) remains conditional on an ample degree of monetary accommodation. So in the end, a steady hand were words used in the discussion in the Governing Council.”
“Our policy has ... has served us well and will continue to do so. Therefore, the other words we (the council) used were patience, prudence, first of all, in assessing, patience and persistence.”
“The risks surrounding the euro area growth outlook remain broadly balanced. However, risks related to global factors, including the threat of increased protectionism, have become more prominent.”
“(So far) they don’t seem to be substantial.
“We don’t know the extent of the retaliation yet ... we can’t know now what are going to be the direct effects of potential retaliation.
“What is certainly known is that these events have a profound and rapid effect on confidence, on business confidence, on exporters conference, generally speaking and confidence can, in turn, affect the growth outlook.”
“Incoming information since our meeting in early March points towards some (economic growth) moderation while remaining consistent with a solid and broad-based expansion of the euro area economy.”
“Economic indicators suggest some moderation in the pace of growth since the start of the year. This moderation may in part reflect a fall back from the high pace of growth observed at the end of last year, while temporary factors may also be at work.”
“Growth is expected to remain solid and broad-based.”
“The underlying strength of the euro area economy continues to support our confidence that inflation will converge towards our inflation aim of below, but close to 2 percent over the medium-term.”
“Measures of underlying inflation remain subdued overall. Looking ahead, they are expected to rise gradually over the medium term, supported by our monetary policy measures, the continuing economic expansion, the corresponding absorption of economic slack and rising wage growth.”
“Measures of underlying inflation remain subdued and have yet to show convincing signs of a sustained upward trend.”
“Declines (in economic indicators) were sharp and in some cases the extent of these declines was unexpected.”
“The bottom line of this discussion (on economic data) is in my view, it’s basically caution in reading these developments, caution tempered by an unchanged confidence in the convergence of inflation to our inflation aim.”
“Measures of underlying inflation ... are expected to rise gradually over the medium term.”
“An ample degree of monetary stimulus remains necessary for underlying inflation pressures to continue to build up and support headline inflation developments over the medium term.”
ON LATVIA’S SUSPENDED CENTRAL BANK CHIEF AND THE ECB’S REPUTATION
“The present situation is one where Latvia can’t vote until there will be a governor in place. That’s a fact.
“I think the reputation of the ECB is pretty good ... We are people and so members might have problems, and that’s why the judiciary process is on its way, and it will be found out.
“Different judiciaries in different countries will do their jobs but what’s really very important for us is that the independence of the central bank governors - even personal independence, beyond institutional independence - be preserved and be protected, and on this point the Governing Council is absolutely compact and in full agreement.”
“The exchange rate stabilised and recent volatility is less, so it was not discussed.”
“The Governing Council will continue to monitor developments in the exchange rate and other financial conditions with regard to their possible implications for the inflation outlook.”
Compiled by EMEA News Desk Editing by Alison Williams