Experts slammed the European Central Bank (ECB) meeting and press conference last week as little more than “monetary policy on the cheap”.
In its monthly meeting, the ECB kept its main interest rate at 0.25 per cent and did not announce any further monetary stimulus measures.
The inaction came in spite of data which showed that inflation in the region had continued to fall in March, reaching 0.5 per cent, perilously close to deflation.
ECB chief Mario Draghi, in his press conference following the announcement, appeared to leave the door open to further “unconventional” monetary easing measures.
But Trevor Greetham, director of asset allocation and manager of Fidelity’s Multi Asset funds, dismissed Mr Draghi’s words as an attempt to “talk down the euro without actually doing anything”.
Mr Greetham said the ECB would be hesitant to commit to any sort of excessive monetary easing policy until it was absolutely sure the eurozone needed it.
Sharon Bowles, the chair of the European Parliament’s economic and monetary affairs committee, said the lack of credit flow to small businesses and the persistently low inflation levels were both “worrying”, especially when the region’s economic recovery was “fragile”.
However, Kathleen Brooks, research director at Forex.com, said Mr Draghi’s willingness to talk about using “unconventional” easing policies, “suggests that the Bank may be getting its bazooka ready once again”.
