The ECB has no plans to curb or curtail its money-printing programme though it expects eurozone economic recovery to broaden and strengthen.
Last month, the ECB embarked on an asset-buying programme with €60bn a month of new money, which it has said will last until at least September 2016.
“Our focus will be on the full implementation of our monetary policy measures,” ECB president Mario Draghi said yesterday.
“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, 2% over the medium term,” he said.
At the last count, eurozone inflation was running at 0.1%. Mr 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%, 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%.
Meanwhile, Mr 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 €74bn, a banking source said yesterday, a reminder of the dire financial straits that the country is in.
“We approved emergency lending assistance and we’ll continue to do so, extend the liquidity to the Greek banks while they are solvent and they have adequate collateral”, Mr 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,” he said..
“For now though the €1 trillion+ money printing scheme to buy chiefly government bonds, is underpinning confidence.”
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