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Better, but not good enough: ECB to keep rates as low amid economic risks, Draghi says

European Central Bank chief Mario Draghi repeated on Thursday a pledge that euro zone interest rates would remain low or could even fall further amid risks for the euro area.

European central bank mario draghi interest rates august 2013Enlarge
(DANIEL ROLAND/AFP/Getty Images)

European Central Bank chief Mario Draghi repeated on Thursday a pledge that euro zone interest rates would remain low or could even fall further amid risks for the euro area.

"Recent confidence indicators based on survey data have shown some further improvement from low levels and tentatively confirm the expectation of a stabilization in economic activity," Draghi said.

However, "the risks surrounding the economic outlook for the euro area continue to be on the downside," he warned at a news conference after the ECB held its interest rates at a record low of 0.5 percent.

Among those risks were recent developments in global money and financial market conditions and related uncertainties and these "may have the potential to negatively affect economic conditions," Draghi said.

Other downside risks included the possibility of weaker-than-expected domestic and global demand and slow or insufficient implementation of structural reforms in euro area countries.

The ECB's monetary policy stance "continues to be geared towards maintaining the degree of monetary accommodation warranted by the outlook for price stability and promoting stable money market conditions," he continued.

"It thereby provides support to a gradual recovery in economic activity in the remaining part of the year and in 2014.

"Looking ahead, our monetary policy stance will remain accommodative for as long as necessary. The Governing Council confirms that it expects the key ECB interest rates to remain at present or lower levels for an extended period of time," Draghi said.

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http://www.globalpost.com/dispatch/news/afp/130801/ecb-keep-rates-low-amid-economic-risks-0