March ECB meeting: Moving closer towards the exit

Banking, Finance, Reports, Shipfinance — By on March 9, 2018 at 12:16 PM

Global Economic & Market Outlook – Focus Notes (Friday, March 9, 2018)

March ECB meeting: Moving closer towards the exit

  • At its monetary policy meeting yesterday, the ECB decided unanimously to omit from the accompanying policy statement the explicit pledge that had been in place since 2016 suggesting that the Central Bank stands ready to increase the volume of monthly asset purchases and/or extend the duration of the programme, should the euro area outlook or financial conditions become less favorable. In the Q&A session, President Mario Draghi attempted to downplay the aforementioned change in the forward guidance, stressing that it does not signify a signal for future monetary policy. He cited that it is substantially “a backward-looking decision”, pointing out the improving euro area growth momentum and reduced uncertainty over the path of inflation converging to the inflation target. However, there were no modifications to the more fundamental parts of the forward guidance, with the ECB reiterating that net asset purchases at a monthly pace of €30bn “are intended to run until end-September 2018, or beyond, if necessary” and interest rates are expected “to remain at their present levels for an extended period of time, and well past the horizon of net asset purchases”.

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