Connect with us


ECB to change policy guidance at next meeting, Lagarde says

ECB to change policy guidance at next meeting, Lagarde says 1

FRANKFURT (Reuters) – The European Central Bank will change its guidance on the next policy steps at its next meeting to reflect its new strategy and show it is serious about reviving inflation, ECB President Christine Lagarde said in an interview aired on Monday.

Announced last week, the ECB’s new strategy allows it to tolerate inflation higher than its 2% goal when rates are near rock bottom, such as now.

This is meant to reassure investors that policy won’t be tightened prematurely and boost their expectations about future price growth, which has lagged below the ECB’s target for most of the past decade.

“Given the persistence that we need to demonstrate to deliver on our commitment, forward guidance will certaintly be revisited,” Lagarde told Bloomberg TV.

The ECB’s current guidance says it will buy bonds for as long as necessary and keep interest rates at their current, record-low levels until it has seen the inflation outlook “robustly converge” to its goal.

Lagarde did not elaborate on how that message might change, simply saying the ECB’s aim will be to keep credit easy.

“My sense is that we will continue to be determined by maintaining favourable financing conditions in our economy,” she said.

She added this was not the right time to talk about dialing back stimulus and that the ECB’s Pandemic Emergency Purchase Programme, which is worth up to 1.85 trillion euros, could “transition into a new format” after March 2022, its earliest possible end-date.

(Reporting by Francesco Canepa; Editing by Peter Cooney and Diane Craft)

Editorial & Advertiser disclosure
Our website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate


Newsletters with Secrets & Analysis. Subscribe Now