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ECB’s Schnabel Says She Sees No Need To Adjust Policy Stance

ECB’s Schnabel Says She Sees No Need To Adjust Policy Stance

The European Central Bank has no reason to add more monetary stimulus at the moment as the economy is evolving mostly in line with its expectations, according to Executive Board member Isabel Schnabel.

“If you look at incoming data, by and large they support the baseline,” she told Reuters in an interview. “As long as the baseline remains intact, there is no reason to adjust the monetary policy stance.”

The comments, less than two weeks before the Sept. 10 policy meeting, come as the euro area emerges from its most severe economic shock since the bloc’s existence. ECB officials began an unprecedented bond-buying and bank-lending spree in March to stabilize financial markets during the pandemic and keep credit flowing to the region’s companies.

Chief economist Philip Lane said last week that the next step is to ensure the measures stimulate inflation. If not, policy makers stand ready to do more, as Schnabel reiterated.

“There could be surprises, both on the upside and the downside, which may mean that we have to reconsider our monetary policy stance,” she said. “But at the moment, that’s not on the cards.”

In the interview, Schnabel also said policy makers haven’t discussed whether to grant larger exemptions to banks from negative interest rates, and that she’s “not worrying too much” about the recent strengthening of the euro against the dollar.”

“If there is a depreciation of the U.S. dollar, this tends to boost global trade and global growth,” she said. “My reading of the depreciation of the U.S. dollar is that it is also a sign of the return of global confidence.”

©2020 Bloomberg L.P.