Despite low inflation: ECB stays with the steady hand policy – n-tv.de NEWS

 Economy
 

 Friday, August 14, 2015

 
 
 

 
 The persistently low inflation in the euro area prepares the ECB have no great concern. Board Member Coeure reaffirmed the course of the Fed to support domestic demand in the currency area.
 

 
 

The European Central Bank (ECB) does not see, despite persistently low inflation in a tight spot. The decisions of the Federal Reserve would affect gradually on lending and the real economy, albeit slowly, Board Member Benoit Coeure said the “Börsen-Zeitung”. “That’s why we want to maintain a steady hand,” Coeure said. Given the weakness of the Chinese economy and the devaluation of the yuan of central bankers called also to to support domestic demand in the euro area.

The ECB and the national central banks pumping in March on a large-scale bond purchase program Week for Week billion into the financial system, to fuel the very low inflation. In July, inflation was as early as June, only at 0.2 percent. But target the monetary authorities is an inflation rate of the medium or two percent.

The ECB would only be forced to act if the economic situation alters radically or long-term bond yields rose sharply, Coeure said. When asked whether burgeoning deflation worries are exaggerated again, he said: “. In the data there is nothing that those estimates based”

devaluation in China as a reminder

The recent depreciation of the Chinese currency depreciated the Governing Director as a symptom of the economic slowdown in the People’s Republic. “In the euro zone, we should understand that but as a reminder, the importance of a strong domestic demand,” Coeure said. It would be unreasonable to establish the long-term growth model in the euro zone solely on exports. Rather, domestic demand should be strengthened through private investment.

Read more about
 
 
 

The new exchange rate regime in China evaluated Coeure as a step towards a more market-determined system. “This is generally good, it strengthens the resilience of the global economy and is in line with recommendations of the G20,” said the central bankers. China’s central bank (POBC) is based at the daily setting of the central rate is now at the previous day’s closing price. Prior to the PBOC adopted a middle rate against the dollar according to criteria that only she knew. The devaluation of the yuan had stirred up in recent days, the financial markets around the world.

Hellas-capital controls of position of banks dependent

Coeure sees no leeway that capital controls to loosen in Greece substantially as long as it was not clear how and when the banks would be recapitalized. The ECB shall consider whether, despite their junk status as collateral accept the Greek bonds as soon as the utility is on “the right track”. However, a first program review by the funder is not necessary for this. “It is possible that we act sooner.”

  Source: n-tv.de
 

  themes