(MENAFN– ecpulse) After the European Central Bank (ECB) left benchmark rates unchanged on Thursday, President Mario Draghi said policy makers will until early next year before assessing further stimulus measures.
Draghi said that bond buying will last for at least two more years with the central bank’s asset sheet edging toward 2012 levels.
Draghi said the ECB is unanimous in its pledge to take further steps if needed, and that officials will be overseeing the impact of inflation on economic outlook.
"Early next year, the Governing Council will reassess the monetary stimulus achieved, the expansion of the balance sheet and the outlook for price stability,” Draghi added.
Draghi also said the ECB will be “particularly vigilant” on oil prices, adding that inflation could fall even further on the recent fall in oil prices.
Stock markets remained steady after Draghi’s comments. The yield on 10-year bonds in Italy increased 6.5 basis points to 2.044%. The euro rose 0.57% to $1.2335.
"Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council remains unanimous in its commitment to using additional unconventional instruments within its mandate. This would imply altering early next year the size, pace and composition of our measures."
"ECB staff and the relevant Eurosystem committees have stepped up the technical preparations for further measures, which could, if needed, be implemented in a timely manner,” Draghi said regarding the possible quantitative easing program.
“The latest data and survey evidence up to November confirm the picture of a weaker growth profile in the period ahead. At the same time, the outlook for a modest economic recovery remains in place,” Draghi said.
Economic data recently has not shown anything to joy for. Inflation has declined to a cyclical low of 0.3%, and unemployment is firmly holding at the 11.5% level.
The flash estimate of third-quarter GDP growth slightly topped expectations at 0.2%. Purchasing mangers’ surveys have been looking subdued, with the composite falling to a 16-month low recently, even as it remains above the crucial 50-mark.
Draghi also announced downward revisions for 2014-2016 growth and inflation forecasts.
The euro edged higher after Draghi`s words that the ECB will stop short of adding QE measures for now, but the downward revisions for inflation and growth could be leaving a way for the bank to start the program.
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