ECB’s Quantitative Easing Program Is Open-Ended, Visco Says

The European Central Bank’s asset-purchase program will continue past September 2016 if it hasn’t met its inflation objectives by then, Governing Council member Ignazio Visco said.

“We are open-ended,” Visco said on Friday in an interview with Bloomberg Television’s Francine Lacqua and Guy Johnson at the World Economic Forum in Davos, Switzerland. “If we see that there are difficulties in achieving this target that we have, we have to continue.”

ECB President Mario Draghi pledged on Thursday to buy 60 billion euros ($68 billion) a month of assets including government bonds through September 2016, adding that buying will “in any case be conducted until we see a sustained adjustment in the path of inflation.” The quantitative-easing package is designed to stave off a deflationary spiral in the 19-nation currency bloc by flooding the region with liquidity and pushing investors into riskier assets.

The euro fell to the lowest in more than 11 years after the decision. The single currency was down 0.2 percent at $1.1341 at 8:50 a.m. Frankfurt time.

“The exchange rate is not a target for the monetary policy but it is an important channel as the portfolio rebalancing will increase the supply of money,” Visco said in the interview. “This is what is going to take place for the next couple of years.”

Bundesbank President Jens Weidmann and Executive Board member Sabine Lautenschlaeger were against implementing QE now, according to euro-area central-bank officials. Klaas Knot of the Netherlands, Ewald Nowotny of Austria and Estonia’s Ardo Hansson also expressed reservations against starting the program at this time, the people said, asking not to be identified because the deliberations were private.

“These tools are legitimate monetary-policy tools,” Visco said. The 65-year-old is also governor of the Bank of Italy. He took the post in November 2011, succeeding Draghi who had led the Rome-based central bank for the previous six years.

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