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the President of the European Central Bank, Mario Draghi during a press conference at the headquarters in Frankfurt, Germany. 8 September 2016. The President of the European Central Bank (ECB), Mario Draghi, said Thursday that the agency was evaluating options that allow you to extend your huge money printing program, as inflation in the euro area still well below the official target. REUTERS / Ralph Orlowski (reuters_tickers)
By Balazs Koranyi and Francesco Canepa
FRANKFURT (Reuters) – the European Central Bank (ECB) maintained Thursday its interest rates at record lows and left the door open to provide more stimulus to the economy, but gave few signals about when apply new measures, which disappointed the markets were expecting bolder comments.
the ECB President Mario Draghi, said the agency will consider options that allow you to go ahead with its program of printing money unprecedented, but not formally guaranteed that prolong asset purchases, whose completion date remains late March 2017.
Faced with anemic growth and inflation, the ECB is buying a total of 1.74 billion euros in bonds, the while maintaining negative real interest rates and provides banks with loans without cost, hoping to pull the euro zone a decade of stagnation and crisis.
The ECB has managed to boost economic growth, but not enough, and even had to cut some of its projections on Thursday, reinforcing market expectations that the implementation of more monetary stimulus is only matter of time.
“at the moment, the changes (projections) are not (enough) substantial to require a decision to act. we see that our monetary policy is effective,” Draghi said wheel press, adding that the ECB governing council did not discuss extending asset purchases at its meeting ended Thursday.
the ECB kept its deposit rate at -0.4 percent, charging banks to park their money in one day, and also left unchanged the main refinancing rate, which determines the cost of credit in the economy, a 0.00 percent.
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The biggest question is what the next step.
Draghi said the ECB had asked its internal committees to review various options for ensure that the program continues to operate smoothly assets. The official used a similar at the end of the monetary policy meeting in October 2015, which was followed by a package of monetary easing six weeks rhetoric.
This time the changes could be only technical but they are a previous work necessary for any formal additional stimulus, as the ECB is running out of assets to buy because they set clear limits on the risks.
“This is a clear sign that the ECB will announce changes technicians purchases QE at the October meeting, which is a prerequisite for any extension of QE (stimuli) beyond March 2017, “said Carsten Brzeski, economist at ING.
the euro hit a peak in two weeks, bond yields in the euro zone rose and stock markets in the region declined after confirmation that the ECB did not discuss an extension of the program of asset purchases by the central bank.
“the disappointment is clearly there in the market, but the ECB did leave the door open to inject more stimulus,” said Kim Liu, senior fixed income strategist at ABN AMRO.
After 18 consecutive months of purchases of government bonds to support the economy and inflation, holdings of ECB debt reached the mark of 1 billion euros last week, but also it is expected that prices in the euro zone rise just 0.2 percent this year, well below its target of nearly 2 percent.
(Writing by Mark John. Balazs Koranyi report. Published in Spanish by Gabriel Burin and Bill Trott)
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