European Union flags flutter outside the European Central Bank (ECB) headquarters in Frankfurt, Germany December 14, 2017. REUTERS/Ralph Orlowski
January 28, 2018
AMSTERDAM (Reuters) – The European Central Bank (ECB) should make it clear how it will end its asset purchases as soon as possible after the current bond buying program ends in September, Dutch central bank president Klaas Knot told Dutch current affairs program Buitenhof on Sunday.
“There is no reason whatsoever to continue the programme”, Knot said. “I feel that we need to be clear about this.”
The ECB will keep its bond purchases program going until the end of September and has left the option open to continue buying bonds after that date.
ECB president Mario Draghi does not want to commit to an end date of the asset purchases right now, as keeping all options open might help to keep the euro’s value in check, Knot said.
“That’s why we don’t commit to communicating now that it has to be done after September,” Knot, who is the Netherlands’ member of the ECB’s governing council, said. “But I think that’s where we’re going and that this sentiment is shared within the governing council.”
Ending the asset purchases would give room to start looking at the possibility of increasing interest rates in 2019, Knot said.
But interest rates will probably only rise slowly and gradually in the coming years, he said. “Interest is mainly low because there are more people that want to save, than that want to invest. This will change as the economy grows, but that will take time.”
(Reporting by Bart Meijer. Editing by Jane Merriman)
