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[HELSINKI] The European Central Bank will keep interest rates at current or lower levels for a long time and has tools available if needed to support the euro zone economy, ECB Governing Council member Erkki Liikanen said on Monday.
"Taking into account the current inflation outlook, our policy rates are expected to remain at present or lower levels for an extended period of time, and well past the horizon of the asset purchases," he said in a statement. "If the outlook or financing conditions deteriorate, the ECB still has capacity to boost inflation and growth."
The ECB unveiled a new stimulus package earlier this month that included cutting all three of its main rates to new record lows but ECB President Mario Draghi blunted its impact by suggesting the ECB would not lower interest rates again.
Mr Liikanen, who is governor of Finland's central bank, said an economic slowdown, particularly in China, and increased market uncertainty, has weakened the outlook for the euro zone.
The Bank of Finland cut its growth forecast for the EU22 countries - the euro zone, Britain, Sweden and Denmark, - to 1.4 per cent this year from a previous 1.8 per cent, and to 1.7 per cent in 2017 from 1.9 per cent previously.
It forecast inflation within the same group of countries to be 0.2 per cent this year and 1.2 per cent in 2017.