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To: Goose94 who wrote (14564)	10/22/2015 11:45:23 AM
From: Goose94	Read Replies (1) \| Respond to of 203362

Lower Negative Interest Rates A Possibility - ECB’s Mario Draghi The European Central Bank is looking at pushing interest rates further into negative territory as one of its tools to promote economic growth and inflation. ECB President Mario Draghi admitted, during his press conference following the central bank’s monetary policy meeting Thursday, the committee discussed the possibility of lower negative interest rates. Ahead of the press conference, the ECB left interest rates on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility at 0.05%, 0.30% and -0.20%, respectively. During the press conference, Draghi described the monetary policy discussion as “rich” and “wide open.” He added that the central bank is not taking a “wait and see” approach but a “work and access” approach. “We are ready to act if needed,” he said. The discussion on a further negative deposit rate has been a shift in the central bank’s outlook as Draghi has said in previous meetings that interest rates are at their lower bound range and would not move lower. The possibility of an increase in the negative deposit rate has caused significant weakness in the euro against the U.S. dollar; however, the stronger greenback has so far not has a major impact on gold prices Thursday. Following the press conference, Comex December gold futures were relatively unchanged; as of 9:52 a.m. December gold last traded at $1,167.80 an ounce, relatively flat on the day. The timing of when the ECB will jump into action is still up in the air. Draghi said during the question-and-answer period that a few committee members talked about acting now but “that was not the prevailing theme” during the meeting. In his introductory statement, Draghi hinted at possible action at the next meeting in December, saying “the degree of monetary policy accommodation will need to be re-examined at our December monetary policy meeting, when the new Eurosystem staff macroeconomic projections will be available.” The hint didn’t come as a major surprise as some economists were already expecting the ECB to introduce more stimulus measures at its December meeting. “Signs of a slowdown in the domestic economy and the continued absence of inflationary pressure warrants stronger policy support. We have pencilled in an increase in the monthly pace of asset purchases from €60bn to €80bn, to be announced after the next meeting on 3rd December,” said Jennifer McKeown, senior European economist at Capital Economics, in a research note Thursday. As to the current economic conditions, Draghi said in his opening statement that recovery remains resilient, but there are growing risks. “The risks to the euro area growth outlook remain on the downside, reflecting in particular the heightened uncertainties regarding developments in emerging market economies, which have the potential to further weigh on global growth and foreign demand for euro area exports,” he said. By Neils Christensen