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Lagarde comments at ECB press conference

FRANKFURT (Reuters) - The European Central Bank left policy unchanged on Thursday but with the economic recovery losing momentum and a strong euro dampening inflation expectations, ECB President Christine Lagarde was expected to set the stage for more stimulus later.

Following are highlights of Lagarde’s comments at a post-policy meeting press conference.

DOWNSIDE RISKS

“Overall, the balance of risks to the euro area growth outlook is seen to remain on the downside. This assessment, largely reflects the still uncertain, economic and financial implications of the pandemic.”

ELEVATED UNCETAINTY

“Elevated uncertainty about the economic outlook continues to weigh on consumer spending and business investment.”

WEAK PRICE PRESSURES

“Headline inflation is being dampened by low energy prices and weak price pressures in the context of subdued demand and significant labour market slack.”

AMPLE STIMULUS NEEDED

“Ample monetary stimulus remains necessary to support the economic recovery and to safeguard medium-term price stability.”

SLOWING SERVICES

“While activity in the manfacturing sector has continued to improve, momentum in the sevices sector has slowed somehwhat recently.”

REINVESTING IN FULL

“We intend to continue reinvesting in full. The principal payments from maturing securities purchased under the APP for an extended period of time, past the date when we start raising the key ECB interest rates. And in any case, for as long as necessary to maintain favourable liquidity conditions, and an ample degree of monetary accommodation.”

EXCHANGE RATE

“In the current environment of elevated uncertainty, the Governing Council will carefully assess incoming information, including developments in the exchange rate, with regard to its implications for the medium term inflation outlook.”

SIGNIFICANT UNCERTAINTY

“The strength of the recovery remains surrounded by signifcant uncertainty as it contunues to be highly dependent on the future evolution of the pandemic and the success of caontainemtn polices.”

STRONG REBOUND

“The incoming (data) since our last monetary policy meeting in July suggests a strong rebound in activity broadly in line with previous expectations.”

Global News Desk

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