No imminent policy change

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.