ECB’s Draghi Says Euro-Area Economy Hasn’t ImprovedStefan Riecher and Rebecca Christie
European Central Bank President Mario Draghi said the economic situation in the 17-nation euro area hasn’t improved since the ECB’s last meeting on April 4.
The Frankfurt-based central bank has been closely watching data as they come in, “and so far we haven’t seen any improvement in the situation,” Draghi said today in Washington.
With doubts growing about the ECB’s projection for an economic recovery later this year, Draghi has signaled he’s looking at a range of measures, including cutting interest rates. ECB Governing Council member Jens Weidmann, who also heads Germany’s Bundesbank, said earlier today that the ECB would only lower borrowing costs to a new record low if economic data worsen. The benchmark rate is currently 0.75 percent.
Asked about the euro’s recent fluctuations against other currencies, Draghi said exchange rates “have been stable within a band” and that “there haven’t been any abnormal movements.”
“Exchange rates are not a policy target for the ECB,” Draghi said. “And at the same time, obviously, they are important for price stability and for growth.”
The ECB predicts the euro-area economy will shrink 0.5 percent this year before growing 1 percent in 2014.