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Financial News: Lagarde Assures Own Style At ECB

Lagarde Assures Own Style At ECB

12/12/2019 - 10:39:00 (RTTNews)

(RTTNews) - European Central Bank's new chief Christine Lagarde said on Thursday that her style of communication cannot be compared to her predecessors as she revealed that a planned strategic review of the bank's monetary policy is set to begin in January and complete by the end of the year. Before taking questions from reporters in her first post-decision press conference, the former IMF managing director told them, "Don't over-interpret, don't second-guess, don't cross-reference. I am going to be myself and therefore probably different."

Lagarde also assured reporters that she will using a "different, non-technical language" to communicate the bank's message to a larger audience beyond the press. The former French finance minister also said that she is "neither a dove or a hawk", but prefer to be a wise "owl" when it came to monetary policy. Earlier on Thursday, the ECB Governing Council decided to leave the interest rates, asset purchases and forward guidance unchanged as policymakers wait for September's stimulus measures to have an effect on the euro area economy. Regarding the much-talked-about strategic review, Lagarde said the process is expected to begin "in the course of January" and the bank hopes to complete it before the end of 2020. A strategic review at the ECB was long overdue, she said, adding that there was nothing unusual about it. She asserted that such a review would be "comprehensive" and will consider opinions from a several sections including academia and citizens. Further, the review will cover a wide range of issues included the immense challenge posed by the climate change to policy. "There is no preconceived landing zone at this point in time for the outcome of the strategic review," Lagarde added. In her first introductory statement, the ECB President acknowledged that "there are some initial signs of stabilization in the growth slowdown and of a mild increase in underlying inflation in line with previous expectations."

She unveiled the latest set to ECB Staff macroeconomic projections that revealed a boost to this year's growth estimate to 1.2 percent from 1.1 percent. However, the GDP growth projection for next year was lowered to 1.1 percent from 1.2 percent, while the forecast for 2021 was retained at 1.4 percent. Growth is forecast to remain at 1.4 percent in 2022. The bank retained the inflation forecast for this year at 1.2 percent, while raised the projection for next year to 1.1 percent from 1 percent. The outlook for 2021 was retained at 1.4 percent and the rate of price growth is seen climbing to 1.6 percent in 2022. The downside risks to the euro area growth outlook are now "less pronounced", Lagarde said, adding that it was "encouraging". The tone of the introductory statement was largely unchanged from Mario Draghi's time and continued to signal that interest rates are likely to remain at the present level or lower for a long period of time, and that there remained a need for ample monetary stimulus in the Eurozone economy.

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