- European Central Bank Governing Council member Jens Weidmann
The European Central Bank assured market participants in its readiness to act and pledged to raise interest rates if needed to curb inflation. The ECB's forward guidance to keep rates at record low or even make another rate cut for an extended period of time does not exclude the possibility that the benchmark rate will be revised upward, the European Central Bank Governing Council member Jens Weidmann said Thursday. During the last week's policy meeting Mario Draghi announced forward guidance for the first time in the ECB's history, saying that borrowing costs will stay at current level for as long as it is needed. At the same time, analysts are expecting that the ECB will not raise rates for at least 12 months.
Mario Draghi left main refinancing rate unchanged at 0.5%, meeting analysts' expectations, and fleshing out the ECB's outlook for the monetary policy, as investors pushed long-term bond yields higher, posing certain risks for the economy. In addition to that, the ECB policymaker Benoit Coeure pointed out that in case conditions attached to the OMT bond-buying plan are fulfilled, the European Central Bank is ready to intervene the markets.
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