–Says “A Few” Governing Council Members Wanted To Cut Rates Today
FRANKFURT (MNI) – The European Central Bank’s decision to leave its
key refinancing rate at 1.0% was taken by “a very broad consensus,” but
“a few members would have preferred to have a rate cut today,” ECB
President Mario Draghi said Thursday.
“This decision was taken by consensus and the discussion was quite
complete. It was taken by very broad consensus,” Draghi told reporters
at a press conference here. The word “consensus” is generally understood
to be ECB code language meaning the decision was not unanimous – a fact
that Draghi subsequently confirmed with his admission that some members
had wanted to cut rates.
Asked why the ECB did not reduce interest rates, Draghi noted that
nominal rates at their current level are low and real rates are
negative.
Draghi also noted recent weak economic data out of the Eurozone,
and said that the ECB stands ready to act if the weakness persists.
Recent confidence indices and orders “pointed in the same direction
and this was not upwards,” Draghi said.
“We are fully aware that the most recent soft data are [on the]
downside. That is why you will find several references to downside risk.
And we will monitor closely all developments and we stand ready to act,”
he added.
Draghi said the ECB staff’s decision to keep the 2012 GDP growth
forecast unchanged rather than revising them down assumed a positive
contribution from external demand and that financial tensions would
ease.
–London newsroom 0044 207 862 7492; email:ukeditorial@marketnews.com
[TOPICS: M$X$$$,M$$EC$,M$$CR$,MGX$$$,MT$$$$]
