Draghi confirms ECB ready to provide cheap loans for banks

FXstreet.com (Barcelona) - At the press conference following the ECB Governing Council's decision to keep interest rates unchanged at 0.5% in October, president Mario Draghi reiterated that key interest rates are expected to remain at the current or lower levels for an extended period of time. The central bank will maintain its accomodative monetary policy in order to support the recovery of economic activity in the euro area.

Nevertheless, unemployment remains elevated, and the balance sheet adjustments of the EU banking sector could weigh on economic activity in the area. Growth could be hurt by weaker than expected global demand and by the slow implementation of structural reforms by national governments.

Inflation in the Eurozone is low and should remain at this level in the coming months. Upside risks on inflation are connected with higher indirect taxes and commodity prices, while downside risks stem from weaker growth.

During the Q&A part of the press conference Mario Draghi confirmed that the ECB Governing Council discussed an interest rate cut during the meeting. He also assured that the central bank was ready to use all the available tools, including LTRO, to encourage lending.