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4/6/2017, 1:48 PM (Source: TeleTrader)
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Policy normalization talk warranted in future: ECB minutes

Members of the European Central Bank's (ECB) Governing Council agreed it was appropriate to "de-emphasize the sense of urgency" towards taking further actions to prop up the economic recovery in the euro area, minutes from their March meeting revealed on Thursday. Moreover, participants stated that if the recovery continues and inflation moves further in line with the bank's target, "a discussion on policy normalization would become warranted in the future."

During its meeting on March 8-9, the Council decided to keep interest rates and elements of its asset purchase program unchanged, agreeing that "very substantial degree of monetary accommodation" was still needed in the Eurozone. Nonetheless, policymakers noted the steady firming of economic recovery in the area, with risks becoming less pronounced, although still tilted to the downside. In addition, they argued, inflation is not experiencing a convincing rebound especially as wage growth remains subdued.

The council also agreed that removing the downward bias on interest rates would be premature due to the remaining uncertainty surrounding the economic outlook and inflation still coming short of policy objectives.

Breaking the News / IB