ECB’s Draghi sees broadening recovery, insists on need for accommodation
Investing.com
Published Jun 27, 2017 04:23AM ET
Draghi insists ECB needs to maintain accommodative monetary policy
Investing.com - European Central Bank President Mario Draghi gave an upbeat view of the euro zone economy on Tuesday, but still urged the need for monetary policy to remain accommodative.
“All the signs now point to a strengthening and broadening recovery in the euro area,” Draghi said at the ECB Forum held in Sintra, Portugal on Tuesday.
“Deflationary forces have been replaced by reflationary ones,” he noted.
Still, Draghi highlighted that, despite above trend growth in the euro area, inflation dynamics have remained muted.
Though the ECB chief was convinced that monetary policy was effective in rebuilding inflation, he pointed out that the reflationary process was being slowed by a combination of external price shocks, more slack in the labor market and changing relationship between slack and inflation.
“The past period of low inflation is also perpetuating these dynamics,” he added.
Draghi also expressed the idea that the factors weighing on the path of inflation were mainly temporary.
“However, a considerable degree of monetary accommodation is still needed for inflation dynamics to become durable and self-sustaining,” he clarified, urging persistence in monetary policy and prudence.
“As the economy picks up we will need to be gradual when adjusting our policy parameters, so as to ensure that our stimulus accompanies the recovery amid the lingering uncertainties,” Draghi concluded.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.