The European Central Bank is ready for any outcome of the U.K.’s referendum to decide whether it will remain in the European Union, said Mario Draghi, president of the ECB.
At a news conference regarding the ECB’s latest economic and monetary analysis, Mr. Draghi said: “Of course, we have said and I will say it again, that the U.K. and Europe and eurozone are mutually beneficial, so the ECB has a view whereby the U.K. should remain in the European Union because the European Union will benefit from its permanence, and we believe the U.K. too would benefit from staying in the European Union.” However, the ECB “is ready to (for) all contingencies.”
Mr. Draghi revealed Thursday that at the latest meeting of the ECB governing council, it was decided that interest rates would remain unchanged. The interest rate on the main refinancing operations of the eurosystem — which provides the bulk of liquidity to the banking system — remains at zero. Overnight credit provided to banks from the eurosystem, known as the marginal lending facility, remains at a 0.25% interest rate. And the interest rate on the deposit facility — which banks may use to make overnight deposits — remains at -0.4%.
The eurosystem will begin purchasing corporate bonds, under its extended asset purchase program, on June 8. It will also begin its new series of targeted longer-term refinancing operations on June 22.
Mr. Draghi reiterated the ECB’s willingness to do whatever it takes to get inflation back up to its target, of close to 2%. In his opening presentation at the news conference, he repeated that the €80 billion ($88.9 billion) per month asset purchase program will run to the end of March 2017 or beyond.
Mr. Draghi later said: “The purchase program is proceeding smoothly. There are some conversations in the market about potential limits that this program may meet with — we are not seeing really any difficulty. We see ample liquidity; the program continues to proceed smoothly. But in case we were to face limits, the design of the program contains enough flexibility so that we can adjust the program in a way that would meet the desired size. And we have given in the previous months ample evidence that we are willing, able and ready to do so.”
