The president of the European Central Bank (ECB), Mario Draghi, said today that the institution maintains its decision to end its program of asset purchases at the end of December, so that the acquisitions will cease in January, despite the economic data weaker than expected.
However, the head of the euro area issuer added in an appearance before the Economic Affairs Committee of the European Parliament (EP) that "a significant level of monetary stimulus will remain" after the end of this program to support the rise in inflation .
Draghi pointed out that nominal inflation rose one tenth in October, to 2.2%, but underlying inflation -which includes the effect of energy and fresh food prices- remains "weak", although it has increased from low levels. previous
In this regard, he said that there are "good reasons to trust that core inflation will gradually increase" from now on, supported by the strength of domestic demand and the increase in wages.
Thus, the ECB trusts that inflation will converge towards the objective of the institution to place it at close levels but lower than 2% and "will remain even after the gradual end" of the asset purchase program.
Therefore, the ECB Governing Council, waiting for the next data to confirm its expectations, maintains its plans to end the asset purchase program at the end of December, Draghi said.
The ECB reduced its purchases in October by half, to 15,000 million euros per month.
However, Draghi insisted that the current "uncertainties" call to be "patient, prudent and persistent" when calibrating monetary policy, and reiterated that the ECB will maintain a significant level of stimulus to support the aforementioned rise in inflation .
This will be provided through the orientation of interest rates and the "large amount of assets acquired and associated reinvestments," he said.
The monetary entity lends the banks weekly to 0% and charges them 0.4% for the excess of reserves.
The ECB maintains its policy despite the slowdown in growth in the eurozone that Draghi considered "normal" and to some extent "temporary".
Draghi considered that a "gradual" slowdown is normal as the expansion matures and growth converges towards its long-term potential, adding that part of it "may also be temporary."
Specifically, he mentioned the recovery of automobile production and that, as international trade stabilizes, its "drag" growth may be temporary.
Eurozone GDP grew 0.2% in the third quarter of the year compared to 0.4% in the previous two, the Italian banker recalled.