Draghi Says ECB Policy Shifts Will Be Predictable, Measured

Wednesday, 14 March 2018 16:23 WIB

ECBMario Draghi


Mario Draghi said European Central Bank policy makers won't rush to remove stimulus amid still-low inflation and warned that U.S. trade policies and a stronger euro could cloud the outlook.

“Adjustments to our policy will remain predictable, and they will proceed at a measured pace that is most appropriate for inflation convergence to consolidate,” the institution’s president said in his opening speech at the annual ECB watchers conference in Frankfurt. Policy shifts will be “taking into account continued uncertainty about the size of the output gap and the responsiveness of wages to slack.”

Euro dropped after his remarks and traded 0.2 percent weaker at $1.2373 as of 9:37 a.m. in Frankfurt. 

Draghi’s comments come a week after officials unexpectedly dropped their pledge to increase bond buying if economic conditions sour, a sign of confidence in the 19-nation bloc’s upswing. In his speech on Wednesday, the ECB president identified developments on foreign-exchange markets and protectionist policies as risks that could undermine growth and weigh on inflation.

The ECB has become increasingly alarmed about exchange-rate volatility in recent months -- Governing Council member Philip Lane said in comments published Tuesday the institution must keep its guard up against the risk of a sudden appreciation in the euro.

Source: Bloomberg




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