European Central Bank officials deemed the current level of interest rates sufficient to cope with potential shocks to the economic outlook, according to minutes from the bank's Governing Council meeting last month.
According to the minutes published yesterday, Thursday, one of the developments that could change the baseline scenario for monetary policy in the Eurozone is inflation moving in either direction.
The minutes added that maintaining key interest rates at their current levels would allow for more information to be available to assess risk factors... and that the current level of key interest rates should be considered strong enough to manage shocks.
The inflation rate in the eurozone, which is close to 2 percent, and the growth of the economy in the 20-member bloc of the European Union, have convinced a majority of the Governing Council members that interest rates do not need to be adjusted from their current level of 2 percent.
Meanwhile, investors expect the deposit rate to remain unchanged at the Governing Council meeting next month, even though new quarterly forecasts may indicate that inflation will fall below target next year.
The minutes of the meeting also noted that the Board of Governors' medium-term orientation meant it was important to avoid an over-reliance on short-term forecasts, although the Board had a clearer view of short-term prospects.
The minutes added that the upcoming December meeting will also allow the Governing Council to update its assessment of the distribution and severity of risks. In this regard, there were open questions concerning how monetary policy should address these risks, as well as the Governing Council's responsiveness to any shift in the distribution of risks, not just their manifestations.
