Key quotes from ECB head Draghi’s press briefing
FRANKFURT, Germany (AP) — At his monthly news conference following the European Central Bank’s policy-setting meeting, President Mario Draghi on Thursday answered questions from reporters.
Here are some highlights of the things he said:
— INTEREST RATES
The ECB kept its key refinancing rate at the record low of 0.5 percent on Thursday. For the first time, it also gave some forward-looking guidance on where it expects interest rates to be in coming months.
“The Governing Council expects the key ECB interest rates to remain at present or lower levels for an extended period of time.”
— HOW LONG?
Reporters pressed Draghi to be more specific on how long rates would remain low. Draghi would not be drawn.
“An extended period of time is an extended period of time.”
— REACTION TO THE FED
Some experts said the decision to provide guidance was meant to bring down borrowing rates in the open market. They had been rising in recent weeks since the U.S. Federal Reserve said it could soon pull back on its monetary stimulus.
Draghi denied the ECB was responding to decisions made by the Fed.
“We are not reacting to other central banks’ monetary policy decisions.”
Portugal has plunged into a political crisis amid fears that the junior party in the ruling coalition might pull its support from the government. It disagrees with the scale of the austerity policies the government is implementing as a condition of its bailout program. That threw European financial markets into a tailspin this week, reigniting fears of another flare-up in the eurozone debt crisis.
“Portugal has achieved very remarkable results. It’s been a painful route and the results that have been achieved have been quite significant and remarkable, if not outstanding.”
The ECB is tasked with keeping the consumer price inflation rate at or near 2 percent. It was 1.6 percent in June, up from 1.4 percent in May. Draghi said inflation was unlikely to keep rising and pass the target.
“Underlying price pressures are expected to remain subdued over the medium term.”