FRANKFURT, Germany (Reuters) – The excessively low inflation hurts consumers and erodes the credibility of the European Central Bank (ECB) president Mario Draghi said Monday , defending the expansionary monetary policy and cut interest rates deposit practiced last December.
“Meeting our goals is related to our credibility,” Draghi told a business forum. “If the central bank sets a target, it can not just change it when it is not met.”
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“The confidence comes from that all parties fulfill their mandate and that. It is what will make the ECB, as the Treaty does not require them, “he added.
The ECB suggested last possibility of more monetary relief in March to fade and growth prospects while inflation remains stuck near zero, well below the bank’s target of around week 2%.
Last December, L os governors of the ECB decided to keep the benchmark rate unchanged at 0.05%. The indicator is a barometer of the interest on loans and has remained stable since September 2014.
However, cut its deposit interest rate, the rate it charges banks to keep their money at the ECB, and announced an extension of its monthly program of asset purchases to fight persistently low inflation and stimulate credit,
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