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ECB's Draghi rejects criticism over inflation pledge

Mario Draghi Image copyright Reuters

European Central Bank President Mario Draghi has fought back against critics, insisting the bank's policies will help to raise inflation.

"Meeting our objective is about credibility. If a central bank sets an objective, it can't just move the goalposts when it misses it," he said in a speech in Germany.

Eurozone inflation is currently 0.2%, way below the ECB's target of near 2%.

But Mr Draghi insisted that the central bank would meet its obligations.

"Confidence comes from every party fulfilling its mandate. And that's what the ECB will do," he said.

Mr Draghi rejected criticism of the ECB's €60bn-a-month stimulus programme, saying that no one had discussed the risks of doing nothing.

"What would that mean for our price stability mandate, and therefore for growth and jobs, and eventually, for the future of our monetary union?," he asked.

Mr Draghi also rejected criticism that the bank's low interest rates could lead to higher house prices because of cheap loans.

"Though low interest rates can encourage risk-taking, there are no warning signs of serious financial instability," he said.

The speech comes just days after Mr Draghi said the bank would "review and possibly reconsider" monetary policy at its next meeting in March.

Analysts interpreted the speech, where he said that there would be "no limits" to action to reinflate the eurozone, as an indication the bank was willing to ease policy further.

His comments come after the ECB decided to keep the bank's main borrowing rate unchanged at 0.05% earlier this month.

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