FRANKFURT – The European Central Bank held interest rates at a record low of 0.75 percent on Thursday, leaving investors to shift their attention to new economic forecasts for clues about possible cuts next year.
Following are comments by ECB President Mario Draghi at a news conference after the ECB's policy meeting.
"The Governing Council continues to see downside risk to the economic outlook for the euro area. These are mainly related to uncertainties about the resolution of sovereign debt and governance issues in the euro area, geopolitical issues and fiscal policy decisions in the United States, possibly dampening sentiment for longer than currently assumed and delaying further the recovery of private investment, employment and consumption."
"It is essential for governments to reduce further both fiscal and structural imbalances and to proceed with financial sector restructuring."
FIXED RATE REFIS
"We have also decided to continue conducting our main refinancing operations, MROs, as fixed-rate tender procedures with full allotment for as long as necessary."
IMPROVEMENT IN 2013
"Later in 2013, economic activity should gradually recover as global demand strengthens and our accommodative monetary policy stance and significantly improved financial market confidence work their way through the economy."
"Economic weakness in the euro zone is expected to extend into next year. In particular, necessary balance sheet adjustments in financial and non-financial sectors and persistent uncertainty will continue to weigh on economic activity."
"Risks to the outlook for price developments are seen as broadly balanced with downside risks stemming from weaker economic activity and upside risks relating to higher administered prices and indirect taxes, as well as higher oil prices."
"We decided to keep the key ECB interest rates unchanged owing to high energy prices and increases in indirect taxes in some euro area countries.
"HICP inflation rates have been elevated for some time. More recently, they have declined as anticipated and are expected to fall below 2 percent in 2013.
"Over the policy-relevant horizon, inflation rates should remain in line with price stability."
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