The European Central Bank made no changes to its monetary policy in a widely-anticipated decision on Thursday, but left the door open to a possible extension of its asset purchase program as its president, Mario Draghi, insisted in the post-decision press conference that accommodation remained necessary.
While holding rates steady at 0%, the ECB also confirmed that its €15 billion ($17.1 billion) in monthly asset purchases was still on track until the end of December, but maintained wording suggesting that it only “anticipates” the program to end at that time.
“An ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term,” Draghi insisted.
Draghi admitted that recent data had been “weaker than expected”, but commented that risks to the euro area growth outlook were broadly balanced.
The ECB chief did warn, however, that “risks relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent”.
In the question-and-answer period, Draghi stressed that, even if the asset purchase program were to end in December, monetary policy would remain extremely accommodative.
Draghi also emphasized that despite global uncertainties surrounding the U.S. China trade dispute, Brexit negotiations between the UK and European Union or Italy’s 2019 budget, he was confident that inflation was on track to reach the ECB’s objective.
“When we look at surrounding developments, we see negotiated wages keep going up, the labor market keeps expanding. ... So we should have no doubt about our confidence that inflation is gradually reaching our aim,” Draghi said.
In any case, the ECB president made clear that policymakers had not discussed future steps, promising to do so at the next meeting (Dec. 13) when they have updated economic projections.
