October 25, 2018 / 1:00 PM / a month ago

Draghi comments at ECB press conference

FRANKFURT, (Reuters) - The European Central Bank kept its policy unchanged as expected on Thursday, staying on course to end bond purchases by the end of December and to raise rates sometime after next summer.

European Central Bank (ECB) President Mario Draghi arrives at a news conference following the governing council's interest rate decision at ECB headquarters in Frankfurt, Germany, October 25, 2018.

Following are highlights of ECB President Mario Draghi’s comments at a post-policy meeting press conference.

ITALY

On Italy, you have to remember that Italy is a fiscal discussion, so there wasn’t much discussion about Italy... Vice President Dombrovskis was there, and I asked him permission to quote him to what he said. He said of course, ‘we have to observe and apply fiscal rules. But we are also seeking a dialogue.’

UNDERLYING INFLATION

While measures of underlying inflation remain generally muted, they have been increasing from earlier lows.

Looking ahead, underlying inflation is expected to pick up towards the end of the year and to increase further over the medium term.

GROWTH RISKS STILL BROADLY BALANCED

The risks surrounding the euro area growth outlook can still be assessed as broadly balanced. At the same time, risks relating to protectionism, vulnerabilities in emerging markets, and financial market volatility remain prominent.

NEAR-TERM GROWTH IMPACT

Some recent sector-specific developments are having an impact on the near-term growth profile.

READY TO ADJUST ALL INSTRUMENTS

The Governing Council stands ready to adjust all of its instruments as appropriate to ensure that inflation continues to move towards the... inflation aim in a sustained manner.

PROTECTIONISM, VOLATILITY

Uncertainties relating to protectionism, vulnerabilities in emerging markets, and financial market volatility remain prominent.

SIGNIFICANT STIMULUS

Significant monetary policy stimulus is still needed to support the further buildup of domestic price pressures and headline inflation developments over the medium term.

UNDERLYING STRENGTH

“The underlying strength of the economy continues to support our confidence that the sustained convergence of inflation to our aim will proceed and will be maintained even after a gradual winding down of our net asset purchases.”

SOMEWHAT WEAKER THAN EXPECTED

“Incoming information, while somewhat weaker than expected, remains overall consistent with an ongoing broad-based expansion of the euro area economy and gradually rising inflation pressures.”

EMEA news desk

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