Draghi ready to fire up the printing press
Peter Walden, News Editor
20 Nov 2015, 2:56 p.m.
The European Central Bank is ready to increase the size of its existing quantitative easing program to ensure they create inflation throughout the Eurozone. Mario Draghi and is colleagues at the ECB will do whatever it takes to ensure the money supply continues to grow and inflation rises.
To achieve this goal the ECB will either increase the amount of monthly money printing via quantitative easing or take the bank's deposit rate further into negative territory. If economic headwinds remain the ECB will likely to introduce the new measures on the 3rd of December.
So far QE has not worked, however, Draghi defended the policy and claiming QE has brought down the cost of borrowing for euro zone business. Currently the ECB is purchasing 60 billion euros a month of government bonds. The ECB’s deposit rate is currently -0.2%, meaning the ECB charges financial institutions for depositing money with them.
With global growth slowing and inflation remaining subdued it appears only a matter of time before the ECB and the other central banks loosen monetary policy further.
The gold price remain unchanged following the announcement and currently trades at £709.17 per ounce. The pound rose against the euro and now trades close to a 12 month high of 1.43 to the euro.