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ECB April Preview: Dovish rhetoric likely to prevail

Image via ECB European Central Bank / Flickr

ECB President, Mario Draghi told financial officials in Washington last Friday that the economic outlook for the Eurozone remained clouded in uncertainty and underlined the ECB’s willingness to take more action if needed to drive up weak inflation. Speaking in Washington in the backdrop of the semi-annual IMF meeting, Mr. Draghi warned that the economic signals from the euro area remained mixed and pledged to do “whatever is needed” to drive up inflation back to the ECB’s 2% target, which has consecutively been missed for three straight years.

Mr. Draghi’s comments come ahead of today’s ECB monetary policy meeting. In the previous meeting, the ECB announced major policy changes in a widely expected move which comprised cutting the ECB’s minimum bid rate to zero percent while lowering the deposit lending rate to -0.40% and increasing the central bank’s stimulus program to €80 billion and announced a new LTRO-II lending program for banks.