Central Banks

ECB's Nowotny says policy on rates, bond purchases set for 2017, still mulling 2018

Key Points
  • Nowotny comments on policy outlook in interview with Austrian magazine Profil
  • Says ECB is a different place on policy that Fed
Dieter Nagl | AFP | Getty Images

The European Central Bank has decided on interest rates and bond purchases for the rest of 2017 and will decide what to do beyond that in the second half of this year, ECB Governing Council member Ewald Nowotny said in an interview published on Saturday.

Nowotny's remarks were in line with recent comments by other policymakers pushing back against German Finance Minister Wolfgang Schaeuble, who has calledfor the ECB to move away from its ultra-accommodative monetary policy. But Nowotny's remarks suggested that the soonest any decision would be reached is July.

"We have decided for 2017. We are continuing bond purchases at a reduced level and leaving the interest-rate structures as they are," Nowotny said in an interview with Austrian magazine Profil. "In the second half of the year we will then reach the decisions concerning the period after the end of 2017."

Schaeuble argued on Thursday that the ECB should follow the U.S. Federal Reserve's lead in charting a course away from an accommodative monetary policy. Nowotny said the situation in the euro zone did not allow that yet.

"The Americans have de facto full employment and an inflation rate close to 2 percent. In the euro zone we have unemployment of roughly 10 percent and inflation is only picking up slowly," Nowotny, who heads the Austrian central bank, was quoted as saying.

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