More ECB stimulus possible, says Draghi

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The President of the European Central Bank, Mario Draghi, has not ruled out the prospect of further ECB stimulus,deVere Group reports.

Stating that the bank will have to “review and possibly reconsider” monetary policy during its next meeting in March, Draghi also confirmed that the bank’s benchmark rate remained unchanged at 0.05%.

The overnight deposit rate was also left unchanged at -0.3%.

During last month’s meeting, the rate had been cut from -0.2% in what was an attempt to urge banks to lend. Also in December, the ECB extended its €60bn-a-month stimulus programme by six months to March 2017.

Eurozone inflation is currently running at 0.2%, way below the ECB’s target of near 2%.

“We have the power, willingness and determination to act. There are no limits how far we are willing to deploy our policy instruments,” Draghi said. “As we start the new year, downside risks have increased again amid heightened uncertainty about emerging market economies’ growth prospects, volatility in financial and commodity markets and geopolitical risks.”

He said that could make it necessary to review – and possibly reconsider – monetary policy at the next meeting in early March.

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