Euro area's economic recovery has been solid, broad-based and resilient, yet inflationary pressures remain subdued, European Central Bank Executive Board member Peter Praet said Monday.
"While we remain confident that inflation developments will eventually return to levels below, but close to, 2 percent our medium-term objective, the evidence still shows insufficient progress towards a sustained adjustment in the path of inflation towards those levels," Praet, who is also the ECB's chief economist, said in a speech in London.
Praet pointed out that all the instruments used by the ECB, including the credit extended to banks under the previous targeted longer-term refinancing operations, or TLTROs, interact to determine the current stance.
That said, the main source of easing at present comes from the interaction between the asset purchases, the moderately negative short-term interest rate and the forward guidance on both these policy tools, he added.
The ECB policymaker also noted that keeping policy rates at their present level for the entire life of the asset purchases is an enabling condition for the purchases to exert their full impact.
The ECB is set to review its policy stance and its tool-kit this autumn.
During more normal market conditions, investors may become "more patient", or, in other words, better able to evaluate the stimulus that can be expected to come from a purchase plan that is to be executed over a more extended time interval, Praet said.
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