A top European Central Bank policymaker on Sunday described how the ECB would approach an asset purchase plan to tackle low inflation, stressing such a program “would not be about quantity, but about price.”
Euro zone inflation is running at 0.5 percent – far below the ECB’s target of just under 2 percent over the medium term.
The ECB opened the door after its policy meeting earlier this month to turning on its money-printing presses to keep inflation from staying too low, though it shows no sign of embarking on such quantitative easing (QE) just yet.
“Asset purchases are an instrument that we are ready to use if we deem necessary,” Benoit Coeure, who sits on the ECB’s six-member Executive Board, said a speech at a conference organized by the International Monetary Fund.
“Further monetary easing is … not excluded, but remains contingent on outcomes,” Coeure said. “If such easing is called for, the Governing Council is unanimous in its commitment to use also unconventional instruments within its mandate.”
Coeure said the ECB would have to decide whether asset buys would be useful and added what he called “a few qualifying remarks” about possible targeted asset purchases by the ECB.