European Central Bank (ECB) policymaker Fabio Panetta said on Wednesday that continued monetary stimulus was still necessary and argued that everything they have achieved so far will be put at risk if they lose patience, per Reuters.
"Inappropriate, sharp reduction of purchases would be tantamount to a tightening of the policy stance."
Premature tightening of monetary policy could turn the supply shock into a prolonged recession."
"Should look through current inflation spike until evidence that upside risks to medium-term inflation are materialising."
"Flexibility has served us well in past months, should become an integral element of our asset purchases."
"Should not be alarmed if we see signs of a one-off catch-up in wages next year."
"Forward guidance condition on rise in underlying inflation is not close to being met."
Current inflation spike a results of a mixture of purely temporary factors; should not ignore medium-term risks."
"Downside risks to economic activity may be growing."
The EUR/USD pair remains under bearish pressure following these comments and was last seen losing 0.3% on a daily basis at 1.1212.
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