ECB's Draghi: Economic weakness in the Eurozone expected to extend into 2013

FXstreet.com (Barcelona) - The ECB Governing Council decided to keep the main interest rate unchanged at 0.75% at their December monetary policy meeting. Speaking at the press conference following the meeting ECB head Mario Draghi commented on the considerations underlying the decision.

The president said that inflation, currently elevated due to high energy prices and indirect taxes, should fall below 2% in the course of of 2013. He emphasized that CPI should remain in-line with price stability and that inflation expectations were firmly anchored.

The ECB expects economic growth to remain weak in the Eurozone next year and then pick up in 2014. GDP is expected to decline between 0.4% and 0.6% this year, while the forecast for 2013 was cut from between -0.4% and +1.4% to between +0.3% and -0.9%.

Mario Draghi also said that the main refinancing operations (MRO) will be continued “as fixed rate tender procedures with full allotment for as long as necessary, and at least until the end of the sixth maintenance period of 2013 on 9 July 2013.”

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