Mario Draghi Benedicte Gravrand, Opalesque Geneva:
Mario Draghi, the head of the European Central Bank (ECB), announced the launch of a bond buying programme in his press conference speech on Thursday (Sept. 6th).
He stated that it had been decided at the Governing Council that the key ECB interest rates would remain unchanged. The Council expects inflation to stay above 2% this year – partly due to high euro-denominated energy prices and increasing indirect taxes in some countries.
"Consistent with this picture, the underlying pace of monetary expansion remains subdued. Inflation expectations for the euro area economy continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term," he said.
Economic growth is expected to remain weak and financial market tensions to deepen - which could be a risk for growth and inflation (the euro area economy is likely to recover only very gradually after that.)
Therefore, the Governing Council decided to start Outright Monetary Transactions (OMTs) in secondary markets for sovereign bonds in the euro area, to address distortions in government bond markets originating from investors’ "unfounded" fears.
Draghi reiterated: "we act strictly within our mandate to maintain price stability over the medium term; we act independently in determining monetary policy; and the euro is irreversible."
The Governing Council also made decisions in order to ensure avai......................
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