The European Central Bank (ECB) may take additional stimulus measures if economic expectations do not improve. ECB President Mario Draghi said that at the forum of the central bank in Sintra, Portugal.
According to Draghi, the ECB’s monetary instruments include interest rate cuts and other options such as purchase programs. According to the Italian central bank president, the ECB still has sufficient room for maneuver for extra stimulation programs. According to Draghi, economic risks continue to increase. Among those risks, he places tensions in international trade, increasing protectionism and weakness in emerging countries. Exports and industry in the eurozone are affected by this.
If the economic outlook does not improve, new stimulus measures are needed, Draghi said.
“The members of the ECB board are going to talk in the coming weeks about how we can adjust our instruments,” said Draghi this morning.
Earlier this month, the ECB announced at the monetary meeting that it would leave interest rates unchanged for longer. The interest rate will certainly remain at the current, very low level up to and including the first half of next year. That is six months longer than previously reported. Draghi also did not exclude the possibility of interest rate cuts.
Today Draghi repeated and reinforced that message. His words did not miss their effect on financial markets. The AEX turned to profit, the euro fell 0.2%.