"We have decided to also include investment grade corporate bonds in our purchase programme: this will help strengthen the effect of Quantitative Easing on the refinancing rates of the real economy”. This was stated by the president of the European Central Bank, Mario Draghi, in the press conference at the end of the Governing Council that he launched a series of new monetary policy measures (strengthening of Qe, rate cuts and new refinancing auctions for banks), moreover "overwhelmingly".
The number one of the Eurotower specified that the securities purchase plan will continue "if necessary" beyond the March 2017 deadline “and in any case until we see a sustained rise in inflation dynamics” to values consistent with the objectives.
“Based on our monetary analysis – continued Draghi – we conducted an overall review of the monetary policy stance and we also reconsidered the economic forecasts up to 2018. The Council has launched a series of measures to safeguard price stability. This package is calibrated to ease financing conditions, stimulate new credit and move the economy, bringing inflation back to 2%".
The new measures, according to the number one of the ECB, "will strengthen monetary policy and encourage bank loans to the real economy". As for the interest rates, “they are expected to stay at this level if not lower for an extended period of time, in any case well beyond the end of our purchasing program”. Furthermore, according to the central banker, the aggregate profitability of the banks will not be damaged by negative rates.
Draghi then announced that the ECB has cut its forecasts for growth in the euro area to +1,4% on 2016 (from the previous +1,7%) and to +1,7% on 2017 (from +1,9%), while +2018% is forecast for 1,8. "All the countries of the euro area must make an effort to prepare a composition of budgetary policies more favorable to growth", added the number one of the Eurotower, explaining that the recovery is being weighed down by "the uncertainty of the emerging countries and the volatility of the financial markets ”.
Also drastically reduced inflation forecasts: +0,1% in 2016 (from the previous +1%), +1,3% in 2017 (from +1,6%) and +1,6% in 2018.
