FRANKFURT (Reuters) – As lavish bond buys are wound down, the European Central Bank will increasingly rely on its forward guidance, a commitment about future interest rates, to provide stimulus, ECB chief economist Peter Praet said on Wednesday.
“As we progress towards a sustained adjustment in the path of inflation and approach the time when net purchases will gradually come to an end, the residual monetary support needed to assist the economy in its transition to a new normal will increasingly come from forward guidance on our policy rates,” Praet said.
“Policy rates will eventually regain their status as the main instrument of policy, and our forward guidance will revert to a singular approach,” Praet told a conference.
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Source: Investing.com