The ECB (European Central Bank) lowered inflation rates, however growth forecast for the Eurozone could still get worse, with President Mario Draghi remaining sceptical about the prospective figures.
The ECB has assured to strengthen or prolong its bond buying programme if conditions worsen, even though none of the bank’s Governing Council currently support it. During the previous week, the ECB left interest rates at record lows as it was expected. The Governing Council kept the main refinancing rate at 0.05% during the meeting that they had in Frankfurt. As for the deposit rate and the marginal lending rate were left at minus 0.2% and 0.3% respectively.
The ECB has been purchasing €60 billion worth of assets, mostly government bonds, each month since March and plans to continue doing so until September 2016 in a bid to bring inflation back to its original target of near 2%. It said that inflation was not rising as quickly as it had planned and that the Eurozone economy was not recovering at the pace expected.
‘The risks to the euro area growth outlook remain negative, reflecting in particular the heightened uncertainties related to the external environment. Current developments in emerging market economies have the potential to further affect global growth adversely via trade and confidence effects.’
– ECB President, Mario Draghi.