'Nothing has been decided for March': top ECB official

3rd February 2016, Comments 0 comments

Financial markets should not bet on the European Central Bank beefing up its stimulus next month as "nothing has been decided," ECB executive board member Yves Mersch said in a newspaper interview Wednesday.

In comments clearly aimed at playing down market expectations for aggressive policy moves at the ECB's next meeting in March, Mersch told the Wall Street Journal that no decision had been made and all options were on the table.

"Sometimes I think people in financial markets have to brush up on their English lessons to understand when we say nothing yet has been decided for March," Mersch said.

"It is not our communication which is flawed, it is the hype that is being provoked by people with vested interests."

Speculation is high that the ECB will aggressively beef up its monetary stimulus at a meeting on March 10 after president Mario Draghi said last month that the bank's decision-making governing council will "review and possibly reconsider our monetary policy stance."

By then the ECB will have updated its regular growth and inflation forecasts and be in a better position to judge whether inflation expectations are still too low.

But the ECB has come under fire for stoking up similar speculation ahead of an earlier meeting in December, but then ultimately disappointing expectations by only timidly lowering rates.

"If you would look at what we communicate, I think this is quite clear. The situation has changed since December, we will re-examine and reassess and possibly, if needed, also correct," Mersch said.

But further monetary easing should not be seen as a foregone conclusion, he insisted.

"Everything is on the table," Mersch said.

The ECB has rolled out a range of different policy measures to help get the eurozone economy back on its feet, most recently a controversial programme of bond purchases known as quantitative easing or QE.

Under that scheme, the ECB aims to buy up 60 billion euros ($65 billion) of bonds every month until March 2017 in a bid to drive up eurozone inflation, which is currently stuck at just 0.4 percent, way below the central bank's target of just under 2.0 percent.


© 2016 AFP

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