He stated that soft monetary policy cannot be eternal. The issue of QE expansion after March next year was not even discussed by the bank. Draghi noted that the incentive program is unlikely to end unexpectedly. He stressed that the monetary policy of the European Central Bank alone is not enough to boost the economy of the euro zone. Draghi recommended that the governments of the Eurozone countries should strengthen their efforts to implement structural reforms that are necessary to boost economic growth.
Market reacted to Draghi’s words with the growth of the euro/dollar pair. The yields of German bonds also increased. Assets on the stock market have fallen. Overall, the market was disappointed with Mario Draghi.
The European Central Bank at its meeting on October 20 decided to maintain the key interest rates at their previous levels: base interest rate – 0 percent, deposit rate – minus 0.4 percent, rate on marginal loans – 0.25 percent. Mario Draghi warned that bets may remain at their current level for a long time. It doesn’t rule out that they’ll be even lower.