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12 Jun 2014
ECB Monthly report: Further action to be taken if inflation remains low for too long
FXStreet (Barcelona) - In the June ECB monthly report published after last week's eventful meeting during which a package of easing measures was introduced, the Governing Council pledges to take further action should inflation remain at low levels for an extended period of time and is “unanimous in its commitment to using also unconventional instruments within its mandate.”
Still, ECB policymakers believe that the risk of outright deflation in the Eurozone is rather remote.
“The Governing Council sees both upside and downside risks to the outlook for price developments as limited and broadly balanced over the medium term,” the report states. “In this context, it will closely monitor the possible repercussions of geopolitical risks and exchange rate developments.”
Moreover, the ECB policymakers point to the continuing gradual recovery in the Eurozone, with a pickup in domestic demand as well as to the improvement in public finances in the area. They note however that unemployment remains excessively elevated.
Still, ECB policymakers believe that the risk of outright deflation in the Eurozone is rather remote.
“The Governing Council sees both upside and downside risks to the outlook for price developments as limited and broadly balanced over the medium term,” the report states. “In this context, it will closely monitor the possible repercussions of geopolitical risks and exchange rate developments.”
Moreover, the ECB policymakers point to the continuing gradual recovery in the Eurozone, with a pickup in domestic demand as well as to the improvement in public finances in the area. They note however that unemployment remains excessively elevated.