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ECB President Mario Draghi speech Sintra Portugal



European Central Bank President Mario Draghi arrives for the European Council Summit in Brussels, Belgium, on March 22, 2019.

JULIEN WARNAND | AFP | Getty Images

Mario Draghi, President of the European Central Bank (ECB), said that the inflation rate does not reach its target.

Speaking at the ECB Forum in Sintra, Portugal, Draghi gave a defiantly dovish tone, saying the economic situation deteriorates in the coming months the bank would announce further stimulus. The euro dropped 0.2% against the dollar in a matter of minutes as Draghi delivered the remarks.

"In the absence of improvement, the additional return of inflation to our aim is threatened, additional stimulus will be required," Draghi stated.

The ECB foresees "lingering softness" in the short term, in particular due to geopolitical Factors and Trade Conflicts, which have been estimated to be the most important drivers of economic growth in the euro zone.

Earlier this month, the ECB revised its interest rate expectations, adding that to its first-post crisis rate hike is unlikely to come before mid-2020. This report shows the central bank is doubtful about economic recovery in the 1

9-member region.

The ECB thus presented new economic forecasts earlier this month, with lower growth and inflation projections for 2020, but marginally higher for this year. [19659002] During his speech in Sintra, Draghi also tried to reassure the market players about the bank's ability to act as a new recession were to materialize.

"The (European) Treaty requires that Our actions are both necessary and proportionate to fulfill our obligations, and we have to give them all up in our mandate to fulfill our mandate – and we will do so again, "Draghi told the audience.

At the same conference, which beg on Monday, different policymakers and ECB watchers raise concerns about the bank's toolkit. "It's pretty obvious," Olivier Blanchard, former chief economist at the International Monetary Fund, told CNBC's Annette Weisbach in Sintra

Nonetheless, Draghi stated

"We remain to make their way to their monetary policy stance. "He said.

And the APP (asset purchase program) has still considerable headroom, "he added.


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