The time has actually not yet come for the European Reserve bank to begin slowly unwinding its huge financial stimulus and the bank is being very mindful with interacting its position about the strong euro, ECB Chief Financial expert and Executive Board member Peter Praet said in an interview to the Belgian newspaper De Tijd, released on Saturday.
When asked if the time has actually come for the ECB to taper its stimulus, Praet said,”Not yet, we are stating.”
“This fall we will decide on our policy next year,” he included.
The text of the interview was put on the ECB website.
Praet repeated that the bank was more confident that inflation will increase to its goal of ‘below, but near to 2 percent’, thanks to the extremely strong economic growth.
That said, underlying inflation remains too low and the ECB needs to be client and persevere with its policy, he added.
“A substantial stimulus is still necessary,” Praet said.
“Everybody concurs that we need to make sure that the decrease of the stimulus occurs in an orderly manner, without any excessive shocks.”
The policymaker also worried that in case of expensive inflation, the ECB will “respond just as ruthlessly” as now in order to get inflation back on track.
Concerning the strong euro, which the ECB has acknowledged as a source of issue, Praet stated, “Our communication about the currency exchange rate is very cautious.”
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