No im­mi­nent pol­icy change

The Star Early Edition - - INTERNATIONAL -

EURO­PEAN Cen­tral Bank (ECB) Pres­i­dent Mario Draghi in­tended to sig­nal tol­er­ance for a pe­riod of weaker in­fla­tion, not an im­mi­nent pol­icy tight­en­ing, when his com­ments sent the euro higher this week, sources fa­mil­iar with Draghi’s think­ing said yes­ter­day. Draghi’s in­ten­tion was to set up Septem­ber as the ear­li­est the bank would dis­cuss rolling back stim­u­lus, but it was by no means cer­tain that it would come to a de­ci­sion then. “The mar­ket failed to take note of the caveats in Draghi’s speech,” a source said. Draghi’s com­ments on Tues­day sent the euro and bond yields sharply higher. Draghi wanted to ac­knowl­edge the re­cent strong eco­nomic data and pre­pare the mar­ket for a pos­si­ble au­tumn de­ci­sion on the fu­ture of the ECB’s €2.3 tril­lion (R33.9trln) bond­buy­ing pro­gramme.

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