ECB President Juan-Claude Trichet commenced the press conference that precedes interest rate decision by his usual line of Benchmark interest rate is appropriate, assuring that the bank expects low domestic price pressures along with price development to remain moderate over the upcoming period, supported by better economic conditions during the second quarter of this year, that will maintain growing and expanding throughout the third quarter of this year.
Despite recent improvement, economic growth in the region is will remain moderate and at uneven pace as the economic outlook is still uncertain. Trichet expressed that inflation is at appropriate levels where monetary policy stance will be adjusted when needed, hinting for no change in interest rates over the short-term.
As for inflation, Trichet assured markets that Medium-Term inflation remains well Anchored, while the bank will seek to maintain price stability over the upcoming period. Trichet stated that We remain firmly committed to price stability over the medium to longer term. The monetary policy stance and the overall provision of liquidity will be adjusted as appropriate. Accordingly, the Governing Council will continue to monitor all developments over the period ahead very closely.
Moreover, Trichet revealed that the upcoming interest rate meeting will hold discussion on appropriate measures to withdraw stimulus.
On Stress Test, Trichet stated that Stress Test were rigorous, while confirming its resilience, moreover, the tests were important to restore investors' confidence, in addition, Trichet called for urgent need for budgetary consolidation.
On Bond purchases, Trichet stated that the government bond purchases ensure better transmission mechanism, while reduction in bond purchases shouldn't surprising.
As for the outlook, Trichet stated that I wouldn't change in any respect the projections that we made last time. We have a new rendezvous next meeting and we will see our new projections. I would warn against drawing hasty conclusions. Adding that We will have a very good second quarter, and a third quarter better than previously expected. I will stick to that and not draw any conclusions.