FRANKFURT (Reuters) - The European Central Bank kept its ultra-easy policy firmly on hold on Thursday but ECB chief Mario Draghi will now face the difficult task of addressing the euro’s potentially damaging surge against the dollar.
Following are highlights of ECB President Mario Draghi’s comments at a press conference after the bank’s policy meeting.
“Now, we have, as I said, downside risks relating primarily to geopolitical and especially foreign exchange markets. But by and large, the risks to growth are balanced.”
“Monetary policy will remain accommodative ... interest rates will remain low well beyond the end of (QE).”
“There is no difference between the accounts (minutes) and what I said in the (previous) press conference.
“What I was asked was did you discuss cutting the link in your guidance between the APP, the asset purchase programme, and inflation? And what is your view on that question? And I responded: we didn’t discuss cutting the link.”
“There hasn’t been much of a change in outlook, except a strengthening of the economy ... by and large, risks are balanced ... Can we declare victory? No. Price pressures along the pricing chain remain subdued.”
“Measures of underlying inflation remain subdued, in part owing to special factors, and have yet to show convincing signs of a sustained upward trend.”
“Yet, looking forward, they (underlying inflation) 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.”
“Looking ahead, on the basis of current futures prices for oil, annual rates of headline inflation are likely to hover around current levels in the coming months.”
“The risks surrounding the euro area growth outlook are assessed as broadly balanced.
“On the one hand, the prevailing strong cyclical momentum could lead to further positive growth surprises in the near term.
“On the other hand, downside risks continue to relate primarily to global factors, including developments in foreign exchange markets.”
“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.”
“Against this background the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability.”
“The strong cyclical momentum, the ongoing reduction of economic slack, and increasing capacity to utilization strengthened further our confidence that inflation will converge towards our inflation aim of below but close to 2 percent.”
“At the same time, domestic price pressures remain muted overall and have yet to show convincing signs of a sustained upward trend.”
“Incoming information confirms a robust pace of economic expansion, which accelerated more than expected in the second half of 2017.”
EMEA news desk