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Draghi says ECB to review policy in December, willing and able to act
November 3, 2015 / 7:12 PM / 2 years ago

Draghi says ECB to review policy in December, willing and able to act

European Central Bank (ECB) president Mario Draghi addresses a news conference after a meeting of the ECB Governing Council in St Julian's, outside Valletta, Malta, October 22, 2015.Darrin Zammit Lupi/Files

FRANKFURT (Reuters) - The European Central Bank's (ECB) policymakers will review the degree of monetary stimulus they have deployed when they meet in December and remain willing and able to act if needed, ECB President Mario Draghi said on Tuesday.

Consumer prices in the 19-country euro zone slipped by 0.1 percent in September, far from the bank's aim of just below 2 percent, prompting calls for the ECB to expand or extend its 60 billion euros ($66 billion) a month of asset purchases.

The program was launched in March to help push inflation back to the ECB's target of just below 2 percent.

Draghi said domestic demand remained resilient in the euro zone, but that concerns over growth prospects in emerging markets were creating "downside risks to the outlook for growth and inflation".

"In this context, the degree of monetary policy accommodation will need to be re-examined at the Governing Council's December meeting," he said.

"The Governing Council is willing and able to act by using all the instruments available within its mandate if warranted in order to maintain an appropriate degree of monetary accommodation."

Draghi said last month the ECB's Governing Council, which includes the Executive Board and the heads of the bloc's 19 central banks, would be in a better position to make a decision once it gets new inflation forecasts from its staff in December.

Analysts have warned that increasing the pace of purchases may create a shortage of bonds down the line and that extending the scheme may require the ECB to change some of the rules of engagement in order to avoid hitting technical limits.

Draghi said the ECB's bond purchases were working well.

"Those asset purchases are proceeding smoothly and continue to have a favorable impact on the cost and availability of credit for firms and households," he said.

Reporting by Paul Carrel; Editing by Louise Ireland

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