NEW YORK (Reuters) - A longer extension of the European Central Bank’s asset purchase program may be more beneficial when markets are calm, ECB Chief Economist Peter Praet said on Wednesday, just weeks before the ECB is due to decide whether to extend stimulus.
“In more normal market conditions... investors may become ‘more patient’, or, in other words, better able to evaluate the stimulus that can be expected to come from a purchase plan that is to be executed over a more extended time interval,” Praet said in a speech that closely resembled his latest comments.
Arguing for the need to continue stimulus, Praet added that the ECB remained “some distance” away from lifting inflation back to its target.
“While the euro area recovery remains solid, broad-based and resilient, the economy has yet to make sufficient progress towards a sustained adjustment in the path of inflation to levels that are consistent with the Governing Council’s aim,” he added.
Reporting by Balazs Koranyi; Editing by Francesco Canepa