26 May 2014
ECB's Draghi: ECB ready to act on inflation risks
FXStreet (Łódź) - The ECB head suggests that inflation should stay low for a prolonged period of time before returning gradually to the 2% target.
• The Governing Council will observe CPI closely to be able to quickly detect risks of inflation failing to follow this scenario and act accordingly.
• “More preemptive action may be warranted if there is a risk that temporary shocks become permanent,” Draghi signals.
• The ECB head attributes 80% of disinflation since end of 2011 to declining commodity prices.
• "For monetary policy to produce its full effects, there must be no binding constraints on credit supply through the banking system.”
• The Governing Council will observe CPI closely to be able to quickly detect risks of inflation failing to follow this scenario and act accordingly.
• “More preemptive action may be warranted if there is a risk that temporary shocks become permanent,” Draghi signals.
• The ECB head attributes 80% of disinflation since end of 2011 to declining commodity prices.
• "For monetary policy to produce its full effects, there must be no binding constraints on credit supply through the banking system.”