An "even more accommodating" monetary policy and unanimity on the use of non-conventional measures. In the usual press conference after the decision on rates, the president of the ECB Mario Draghi confirmed the policy of still low interest rates "for an extended period".
Today the directorate of the Eurotower has left the interest rate reference unchanged at the historic low of 0,15%, the level reached in the last meeting on rates when the package of measures that the ECB intends to implement to deal with the drop in inflation was announced.
Draghi said the latest information available indicated that the euro area continued its moderate recovery in the second quarter, with low inflation rates and modest credit and money growth. At the same time, inflation expectations for the euro area over the medium to long term continue to be firmly in line with the objective of inflation below but close to 2%. Indeed, in the coming months inflation will remain low to rise again in 2015 and 2016.
"The combination of monetary measures decided last month has already led to a further easing of monetary policy - said Draghi - To this will be added the monetary operations that will be implemented in the coming months which will support business loans". “The ECB will take new measures, if necessary, to combat too prolonged a period of low inflation,” Draghi reiterated.
"If our assessment of inflation were to change, we would use the large-scale purchase programme," said the ECB president, referring to quantitative easing which would imply the purchase of government bonds.
TOWARDS MEETINGS EVERY SIX WEEKS
At the press conference, the president of the Eurotower also announced that from January 2015 the ECB's monetary policy meetings will take place every six weeks, from the current four, and the minutes of the sessions will be published. And this for two orders of reasons. The first is that according to Draghi the ECB shouldn't act every month. The second is that in any case, waiting for an intervention every month generates consequences on the market.
As regards the risks to financial stability, which was the subject of Janet Yellen's speech to the IMF yesterday, Draghi made it clear that the ECB is not ignoring the risks, especially in the light of the imminent entry into force of single supervision, but that the work financial stability is done within policies that aim to restore price stability.
Draghi reiterated that the exchange rate is not an ECB policy objective but it is becoming very important: four years ago it was energy prices that contributed two-thirds to inflation, now the weight of the exchange rate has grown. The European Central Bank will closely monitor the repercussions on geopolitical developments and those of the euro exchange rate.
THE NEW MEASURES IN FAVOR OF CREDIT
The first TLtro, the new long-term loans to banks conditional on credit to households and businesses, will be on 18 September and 11 December. Under this new scheme, banks will be able to borrow on these two occasions, an amount equivalent to up to 7% of their loans to non-financial corporations. Subsequent loans (March, June, September and December 2015) will be conditioned on the behavior of institutions in terms of business credit. In particular, the amount will be limited to three times the difference between net loans from 30 April 2014 and a benchmark set by the ECB. Overall, Ltro loans could total €1.000 trillion.
In any case, Draghi wanted to recall that the countries of the Eurozone must not loosen their efforts to adjust their balance sheets, relaunching growth with structural reforms and with a "consolidation of accounts conducive to growth". For the president of the ECB Respect for EU pacts is essential for reducing debt.
