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by Balazs Koranyi and Francesco Canepa
FRANKFURT (Reuters) – The European Central Bank (ECB) reaffirmed Thursday its willingness to end its program of net badet purchases end 2018, indicating that the risks World Trade War can not justify reversing its decisions of mid-June.
At the same time that the institution kept its rates at historically low levels – including 0% for the refinancing rate, its main policy tool monetary and -0.4% for the deposit facility rate – its chairman Mario Draghi stressed that his message had not changed since last month.
She still intends to stop at the end of the year her program of badet purchases of 2.600 billion euros, first decreasing its monthly amount from September, then keep its rates unchanged until at least next summer.
"At this point, we do not feel the need to change or aj new elements to our advanced communication on rates "compared to the June 14 meeting, Mario Draghi told the press.
He acknowledged that some signs of weakness had appeared in the economies of the euro area, in particular, a slowdown in exports in the face of trade tensions which, if they were to worsen, would change the situation.
"Clearly a trade war, in which a series of reprisals calls for a series of responses, would create a completely different climate Mario Draghi said:
The outcome of the meeting Wednesday between US President Donald Trump and European Commission President Jean-Claude Juncker, who agreed to work to lower trade barriers rather than reinforcement, gave rise to hopes of de-escalation.
"We took note," said the president of the ECB. "It is too early to badyze the content in detail (…) but if we can say something general, it's a good sign."
NO DISCUSSION ON REINVESTMENTS
In the meantime, the ECB estimates that, despite a less favorable business climate than at the end of 2017, the euro area economy remains on a "generalized and solid" growth trajectory.
Similarly, it considers that the sustainable convergence towards its objective of an inflation "close to but less than 2%" will continue in the coming period "and will continue even after the progressive reduction of our net purchases of badets. "
However, Mario Draghi stressed that a "significant" monetary policy support was still necessary.
Valentin Bissat, an economist at Mirabaud Asset Management, estimated that the ECB had confirmed Thursday its globally accommodating speech. 19659002] "Mario Draghi claimed that the market was in line with the ECB's view of interest rate hikes, confirming our scenario of a first increase in the ECB deposit rate of 10 basis points. September 2019, "he said.
In the markets, the euro first wiped out its losses against the dollar when the ECB president reported the decline in uncertainties regarding the inflation outlook .
It then went down again when Mario Draghi reaffirmed that the ECB would not touch its rates until the summer of 2019. Euro zone benchmark government yields followed the same trend, gaining up to around three basis points before slowing down.
After stopping its net badet purchase program, the ECB stresses that it will maintain a very accommodative monetary policy with the reinvestment of the amount bonds acquired when they fall due
Mario Draghi indicated that the Governing Council had not discussed the terms of these reinvestments and that they would be fixed in the coming months.
"Despite the As there is no deadline for reinvesting maturing bonds, we believe that the ECB will pursue this policy until at least the first quarter of 2020, "said Valentin Bissat.
(Yann Le Guernigou, Marc Joanny and Patrick Vignal for the French service, edited by Bertrand Boucey)
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