ECB maintains QE policy on slower growth

FRANKFURT • The European Central Bank (ECB) maintained its pledge to move slowly in removing euro-area stimulus, setting the stage for president Mario Draghi to face questions over a recent spate of weaker than expected economic data.

Policymakers reiterated that they’ll continue buying €30 billion (RM140.89 billion) of assets a month until at least the end of September, while linking the conclusion of quantitative easing (QE) to a sustained adjustment in inflation. They kept interest rates unchanged and repeated that they expect borrowing costs to stay at present levels until well past the end of net bond purchases.

The ECB also repeated that additional support will come from its policy of reinvesting maturing debt.

The unchanged decision comes a few days after Draghi acknowledged at the International Monetary Fund meetings in Washington that while the euro-area’s growth may have come off the boil, the economic expansion will continue.

Inflation, meanwhile, remains well below the central bank’s goal, and was unexpectedly revised to 1.3% in March from an initial estimate of 1.4%. Several policymakers have expressed confidence nonetheless, with Executive Board member Yves Mersch arguing that the dip in price pressures has been less pronounced than expected.

Economists surveyed by Bloomberg don’t expect policymakers to start making changes to stimulus until June at the earliest. — Bloomberg