BRUSSELS (MNI) – The European Central Bank’s decision to extend its
liquidity operations is absolutely not a monetary policy signal,
European Central Bank President Jean-Claude Trichet said on Thursday.
“There is no signal of monetary policy in this decision taken on
three-month operations,” Trichet said. “I’m absolutely clear that the
Governing Council has no intention to signal any change in rates, which
we consider appropriate in the present situation.”
The ECB president was responding to questions after the central
bank’s monthly meeting, after which it said it would keep interest rates
on hold at 1% and would extend its generous liquidity provision via its
open-market operations for as long as is necessary.
Trichet said the money market operations are aimed at ensuring the
transmission of the central bank’s monetary policy. He noted that there
had been some improvement in the money markets.
“We do what is necessary to deliver [price stability] – it’s not
only a promise, it’s a track record,” the ECB President said, pointing
out that the average inflation rate over the first 11 years of the
Eurozone is 1.97%.
The ECB targets an annual inflation rate of close to, but below,
2%.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
[TOPICS: MT$$$$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]
