SINTRA, Portugal, June 18 (Reuters) - The European Central Bank will need to ease policy again, possibly through new rate cuts or asset purchases, if inflation doesn’t head back to its target, ECB President Mario Draghi said on Tuesday.
“In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required,” Draghi told the ECB’s annual conference in Sintra, Portugal.
“That aim is symmetric, which means that, if we are to deliver that value of inflation in the medium term, inflation has to be above that level at some time in the future.”
He added there was still “considerable headroom” for more asset purchases and “further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools”.
“Will use all the flexibility within our mandate to fulfill our mandate – and we will do so again to answer any challenges to price stability in the future,” Draghi said. (Reporting By Francesco Canepa and Balazs Koranyi)