ECB will do what is needed to keep inflation target on track: Draghi

Sat Oct 31, 2015 6:25am EDT
 
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By Stephen Jewkes

MILAN (Reuters) - The European Central Bank (ECB) is ready to do what it takes to keep its medium-term inflation target on course, its head Mario Draghi said in a newspaper interview published on Saturday.

Consumer prices in the 19-country euro zone slipped by 0.1 percent in September - far from the bank's aim of just below 2 percent - prompting calls for the ECB to expand or extend its 60 billion euros a month of asset purchases.

"If we are convinced that our medium-term inflation target is at risk, we will take the necessary actions," Draghi told the Italian daily Il Sole 24 Ore.

"We will see whether a further stimulus is necessary. This is an open question," he said, adding it would take longer than was foreseen in March to return to price stability.

Draghi said inflation in the euro zone was expected to remain close to zero, if not negative, at least until the beginning of next year.

"From mid-2016 to the end of 2017, also due to the delayed effect of the depreciation in the exchange rate, we expect inflation to increase gradually," he said.

Asked about what other monetary tools the ECB could use, Draghi said the bank already had an extensive set of monetary policy instruments at its disposal.

"However, it is too early to say in any case that 'this is the menu' and that 'there is nothing to add'", he said.   Continued...

 
European Central Bank (ECB) president Mario Draghi addresses a news conference after a meeting of the ECB Governing Council in St Julian's, outside Valletta, Malta, October 22, 2015. REUTERS/Darrin Zammit Lupi/Files