ECB's Mario draghing feet on policy change
September 7, 2017![Symbolbild Eurobonds](https://static.dw.com/image/39066264_800.webp)
While leaving its benchmark interest rate unchanged at zero percent, the European Central Bank again played for time on Thursday, with the lenders's president, Mario Draghi, dropping no strong hints as to when he would start reducing the bond-buying program.
Launched in March 2015, that quantitative easing scheme is forecast to total 2.3 trillion euros ($2.75 trillion) by the end of this year, with the ECB likely to only gradually withdraw its stimulus measures in the course of next year.
But the 25-head governing council saved a big announcement on ending its easy-money policy for October while striving to balance conflicting pressures.
"This autumn, we will decide on the calibration of our policy instruments beyond the end of the year," ECB chief Mario Draghi said referring to the ECB's bond-buying program. "The bulk of the decisions will be taken in October," he added.
Torn between arguments
On the one hand, the lender is running up against the limits set in its own rules and insisted on by European and German courts, which bar it from buying more than 33 percent of any one country's sovereign debt.
On the other hand, two other factors are arguments against rapid tapering plans, notably a stronger euro and still sluggish inflation across the eurozone.
Along with ultra-low interest rates and cheap loans to banks, the ECB's 60-billion-euro ($71.5-billion) of bond purchases per month are designed to encourage growth in the euro area and pushing inflation toward the central bank's own target of just below 2.0 percent.
But August figures from the European statistics office, Eurostat, showed inflation at 1.5 percent, well short of the ECB's goal. What's more, core inflation, which excludes volatile food and energy prices, reached just 1.2 percent in the same month.
"The appreciation of the single currency [and the latest inflation figures] have strengthened the case to delay the formal announcement of tapering until October," Capital Economics analyst Jennifer McKeon said in a statement.
hg/uhe (AFP, Reuters)