ECB will take additional easing action if necessary: Mario Draghi
FRANKFURT—The European Central Bank is willing to take additional easing steps including purchases of government bonds if needed to keep inflation from staying too low for too long, ECB President Mario Draghi said Monday.
Mr. Draghi’s remarks, in testimony to the European Parliament, underscored the central bank’s commitment to expand its balance sheet—the value of assets it holds—and if necessary widen its stimulus efforts to ensure that inflation rises back to the ECB’s target of just below 2%.
“We need to remain alert to possible downside risks to our outlook for inflation, in particular against the background of a weakening growth momentum and continued subdued monetary and credit dynamics,” Mr. Draghi said in testimony to the European Parliament.
“If necessary to further address risks of too prolonged a period of low inflation, the governing council is unanimous in its commitment to using additional unconventional instruments within its mandate,” Mr. Draghi said, largely reiterating comments he made at his last news conference on Nov. 6.
The euro extended its losses Monday on Mr. Draghi’s comments. Asset purchases by central banks increase the supply of money in the economy, which tends to weaken a currency. European stock markets advanced on his remarks.
