ECB will keep easy policy for as long as necessary: Praet
FRANKFURT: The European Central Bank will keep monetary policy easy for as long as necessary in light of risks such as slower growth in emerging economies, its chief economist said in an interview with a Belgian newspaper.
The ECB cut its deposit rate earlier this month and extended its asset purchase program in a bid to bring inflation in the euro zone, currently just above zero, back to its target of almost 2 percent.
“It (the ECB) will pursue an accommodative monetary policy for as long as is necessary. Without giving a date, this timescale is fairly long,” Peter Praet, who is also a member of the bank’s executive board, told La Libre Belgique.
“Additional risks have arisen from the slowdown in the emerging countries, risks that are pretty significant for the euro area. There are also downward pressures on prices in the manufacturing sector as a result of surplus output and the very high unemployment level.”
He added, however, that the ECB cannot act on its own and governments also need to do their part. “…People expect too much from the ECB, if other actors rein in their efforts whenever we take action,” Praet said. “We are seeing less of an effort on the public finance side.”