The European Central bank (ECB) President Mario Draghi is expected to give the opening speech at ECB conference on CESEE in Frankfurt later today. The conference, called “Resilience to global headwinds” is expected to last about 15 minutes and is scheduled at 08:15 GMT.
The address is coming after a couple of key ECB policymakers claimed that they would cut the interest rates and use the Quantitative Easing strategy if it’s needed. Finland’s central bank president Olli Rehn, who could succeed Mario Draghi this October, together with the Slovakian Peter Kazimir, declared this on a press conference.
“The Governing Council may, should economic developments so require, strengthen its forward guidance and its linkage to the achievement of the price stability objective, lower the monetary policy rates and introduce possible mitigating measures, and/or relaunch net purchases under the securities purchase program,” said Rehn during a press conference.
Rehn backed Mario Draghi, who said that the ECB would use any available tool to boost the inflation, which has been way behind the ECB target.
“In case of a further weakening of economic activity and materialization of adverse contingencies, the Governing Council is determined to act and stands ready to adjust all of its instruments, as appropriate,” he added.
The ECB has been criticized in the past for keeping the interest rates too low (in this moment below zero) since it is hindering the credit flow, thus affecting the transmission of its monetary policy. Some are even pushing for a multi-tier deposit rate that would exempt banks for paying the -0.4% charge on an excess of reserves.
The ECB has considered boosting the interest rate for the beginning of 2020, after retracting this move several times in the past.
Draghi’s address is expected to affect the EUR/USD pair positively if he signals a less dovish position.