FRANKFURT: The European Central Bank is close to declaring that risks to growth are balanced, a departure from its generally more pessimistic stance, but its already announced measures should be implemented as agreed, ECB board member Yves Mersch said on Monday.
“If the euro area economy recovers and inflation proceeds further on its path towards the ECB’s inflation aim in a sustained manner, a discussion on policy normalisation becomes warranted in the future,” Mersch told a conference in Tokyo.
“Any such discussion should, of course, take place in a structured, orderly and appropriately prudent manner.
“The Governing Council is convinced of the need to continue an accommodative monetary policy stance, without deviation from the announced measures under implementation to be expected,” he added.
Still, the ECB needed to examine how its various policy measures function in an environment of more balanced prospects, as opposed to the environment of deflationary risk that prevailed at the time of their introduction, Mersch added.
The ECB now guides for rates to stay at current or lower levels well beyond the end of its asset purchases. It also stipulates that asset buys could be increased if the outlook worsens. — Reuters
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