What to expect from ECB’s Draghi ahead of March meeting

Mario Draghi, chief of the European Central Bank, will meet in Brussels on Thursday for the ECB’s March policy decisions discussing the lowering of interest rates, threats to the eurozone and consequences of the declining oil price.

Due to the negative Eurozone inflation seen in February, there is already predicted to be a a new fresh easing package unveiled following Thursday’s talks.

Draghi said on 1st March, “The review has to be seen against the background of increased downside risks to the earlier outlook amid heightened uncertainty about emerging market economies’ growth prospects, volatility in the financial and commodity markets, and geopolitical risks. In this environment, euro area inflation dynamics continue to be weaker than expected,”

There has also been a prediction that there will be an increase in the 60 billion euro per month asset buys, however this is is still questioned by others who see this Thursday’s ECB conference as a time for technical changes to quantitative easing. The open question is how much of that stimulus will seep into the real economy vs the short term impact on financial asset valuations.

Draghi has also commented ahead of Thursday’s meeting, saying there would be a more in-depth analysis of the potential second-round effects of the inflation fall and said the ECB would not hesitate to act, if needed. “The Governing Council has a variety of instruments at its disposal to respond, if warranted, and there are no limits to how far we are willing to deploy our instruments within our mandate to achieve our objective of inflation rates below, but close to 2 percent over the medium term,”

 

08/03/2016

 

 

 

 

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Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.