July 26, 2018 / 12:53 PM / in 3 months

Draghi comments at ECB press conference

FRANKFURT (Reuters) - The European Central Bank kept its policy unchanged on Thursday and said it still plans to wrap up its lavish bond purchases by the end of the year and sees interest rates at record lows through the summer of 2019.

Following are highlights of ECB President Mario Draghi’s comments at a press conference after the bank’s policy meeting.

EXPORT SLOWDOWN

“The moderation in growth ... depends essentially on the pullback from the unusually strong growth rates that we’ve seen in the last three quarters last year, which were caused predominantly by an unusually strong export performance.

“And so now there is a pullback and the export performance is much less strong than it was before.”

TRADE WAR

“A trade war, where you have rounds of retaliation and rounds of responses, would create an entirely different climate. And we will have to assess both the direct effects, which may be significant as the numbers significantly go up, and indirect effects of confidence, especially on business investment. And that is - we haven’t done anything different from last time yet. So we will have to assess in the future.”

NOT TARGETING FX RATES

“We said several times that the exchange rate is not a policy target, that it’s important for growth and price stability, and there is an international consensus that has been going on now for years, for decades, perhaps, about abstaining from competitive devaluations of sorts.”

NOT CHANGING LANGUAGE ON RATES

“At this stage, we don’t see the need to modify or to add new language to our forward guidance on rates.”

EU-US TRADE TALKS

“We basically took note of that. It is too early to assess the content. I understand that today the Commission is meeting today for this reason so we took note of this meeting.

“If one can say something general it is a good sign because in a sense it shows that there is a willingness to discuss trade issues in a multilateral framework again.

“But it would be very - it would be difficult for us to go beyond that because we really don’t know the substance of it.”

STRUCTURAL REFORMS NEEDED

“The implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment, and boost euro area productivity and growth potential.”

INFLATION UNCERTAINTY RECEDING

“Uncertainty around the inflation outlook is receding. Looking ahead, underlying inflation is expected to pick up towards the end of the year and thereafter to increase 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.”

SOLID, BROAD-BASED GROWTH

“While uncertainties, notably related to the global trade environment, remain prominent, the information available since our last monetary policy meeting indicates that the euro area economy is proceeding along a solid and broad-based growth path.”

INFLATION CONVERGENCE AHEAD

“The underlying strength of the economy confirms our confidence that the sustained convergence of inflation to our aim will continue in the period ahead and will be maintained even after a gradual winding down of our net asset purchases.”

EMEA news desk

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