European Central Bank (ECB) President Mario Draghi repeated on Thursday that interest rates would remain at present or lower levels for an extended period of time, a move the bank hopes will support a recovery in the euro zone later this year and in 2014.
“The Governing Council confirms that it expects the key ECB rates to remain at present or lower levels for an extended period of time,” Draghi told a press conference, after the bank left its main interest rate on hold, as expected, at a record low of 0.5 percent.
The economy would need to improve “better than our base scenario” for the bank to change its forward guidance, he said.
“Our monetary policy stance remains accommodative for as long as necessary. We have unanimously confirmed the forward guidance we gave last time,” Draghi added.
Draghi’s forward guidance, first issued last month, surprised financial markets, because of the ECB’s tradition of never pre-committing on future rate decisions.
Draghi said the ECB board had discussed whether to repeat the message about interest rates, and concluded it might not repeat forward guidance if it is convinced markets grasp that the message still holds.
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