ECB-POLICY/DRAGHI ECB committed to full QE programme, sees stronger recovery

Record ID: 135244

  • Title: ECB-POLICY/DRAGHI ECB committed to full QE programme, sees stronger recovery
  • Date: 15th April 2015
  • Summary: FRANKFURT, GERMANY (APRIL 15, 2015) (REUTERS) PROTESTER ON DESK PROTESTER BEING TAKEN AWAY BY SECURITY
  • Embargoed: 30th April 2015 13:00
  • Keywords:
  • Location: Germany
  • Country: Germany
  • Topics: General
  • Reuters ID: LVA3R43ZCTY8FI49WRS8FRGHS0WR
  • Aspect Ratio: 16:9
  • Story Text: European Central Bank President Mario Draghi announced on Wednesday (April 15) that the ECB has left interest rates unchanged, holding them at record lows as its money-printing scheme shows early signs of perking up the region's economy.
    "Based on our regular economic and monetary analysis and in line with our forward guidance, we decided to keep the key ECB interest rates unchanged," Draghi said in his monthly news conference in Frankfurt.
    The ECB has no plans to curb or curtail its money-printing programme although it expects euro zone economic recovery to broaden and strengthen.
    Last month the ECB embarked on an asset-buying programme with 60 billion euros a month of new money, which it has said will last until at least September 2016.
    "Purchases are intended to run until the end of September 2016 and, in any case, until we see a sustained adjustment in the path of inflation that is consistent with our aim of achieving inflation rates below, but close to, two percent over the medium term," Draghi said.
    At the last count, euro zone inflation was running at -0.1 percent.
    Draghi said he was surprised at speculation about exiting the programme early since it was only a month old.
    His news conference was disrupted when a woman in a black T-shirt jumped on the podium, shouting "End the ECB dictatorship."
    Earlier, the ECB left interest rates at record lows as its bond-buying scheme shows early signs of perking up the region's economy.
    The main refinancing rate, which determines the cost of credit, is now just 0.05 percent, while the ECB's deposit rate, which means banks pay to park funds at the central bank and has the most influence on market rates, is -0.2 percent.
    Draghi said help for cash-strapped Greece was firmly in the hands of the Greek government, which has yet to produce a programme of economic reforms that is acceptable to its creditors.
    ECB policymakers sanctioned further Emergency Lending Assistance for Greece's banks up to 74 billion euros, a banking source said on Tuesday (April 14), a reminder of the dire financial straits that the country is in.
    "We approved ELA and we'll continue to do so, extend the liquidity to the Greek banks while they are solvent and they have adequate collateral," Draghi said, adding that there was no end date for emergency assistance.
    Time is running out for Athens to improve a package of reforms required for the release of loans that it requires to stay afloat.
    Were Greece, first bailed out in 2010 and again two years later, ultimately to tumble out of the euro, it would deal a blow to the credibility of the currency union.
    For now though, the 1 trillion-euro-plus money printing scheme to buy chiefly government bonds is underpinning confidence.
    The ECB meeting was held a day early to allow Draghi to join finance ministers and central bankers from the Group of 20 top economies at the International Monetary Fund's Spring meeting in Washington.
    In its World Economic Outlook on Tuesday, the IMF raised growth expectations for all the major economies in the bloc.
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