As reported by Reuters, the European Central Bank’s (ECB) Benoit Coeure made comments to Germany’s Taggespiegel news agency, highlighting that the ECB is likely to remain stuck on interest rates for at least a year as the European monetary authority keeps the roll-back of its easing measures at a sluggish pace.
Key highlights
The ECB currently plans to wrap up its €2.6 billion bond purchasing plan in December of this year, but the central bank’s plans involve remaining on hold with interest rates until 2019’s final quarter, with trade disputes and wavering support for the European Union program sees significant headwinds threatening the ECB.
Coeure noted that “ample” monetary stimulus is still required to maintain the ECB’s target inflation rate of near-but-below 2%, and although inflationary pressures have begun to pick up, Coeure noted that more time is still needed before the ECB will be comfortable with pulling the stimulus rug out from underneath the European economy, which the central banker called ‘robust’, but still needs more work on shoring up fiscal policies and economic reforms at the national level.
“We expect interest rates to stay at the current level at least through the summer of 2019. But we have already started to reduce our net asset purchases and anticipate them ending after the end of December,” Coeure told the newspaper in an interview released on Sunday ahead of publication on Monday. – Reuters
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