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Draghi Says ECB Stimulus Will Raise Inflation Without Delay

  • `No doubt' ECB ready to intensify asset program if need arises
  • Draghi says in Bologna ECB is monitoring all economic data

European Central Bank President Mario Draghi said he expects current stimulus will be enough to return euro-area inflation to the goal of just under 2 percent, though officials stand ready to boost stimulus if needed.

“After the re-calibration of our instruments put in place this month by the Governing Council, we expect inflation will reach our objective without undue delay,” Draghi said in a speech in Bologna on Monday. Echoing his recent policy statements, he said that “there is no doubt that, if we had to intensify the use of our policy tool to reach our price-stability objective, we would do so.”

At its Dec. 3 policy meeting, the ECB approved a package which included lowering the deposit rate, extending the duration of its asset-purchase plan and committing to reinvest the principal of expired bonds. Even so, the stimulus fell short of market expectations, sending the euro higher.

“We continue to monitor the evolution of economic and financial conditions attentively,” Draghi said. “The combination of our monetary policy from the demand side with structural reforms from the supply side will greatly contribute to creating the conditions for a truly structural recovery.”

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