Eurozone recovery moving ahead slowly, some stimulus yet to kick in: Draghi

[VIENNA] European Central Bank President Mario Draghi said on Thursday the eurozone's economy was improving and that stimulus in the pipeline would add to this.

"Economic recovery is gradually proceeding," he told a news conference in Vienna.

"Additional stimulus ... is expected from the monetary policy measures still to be implemented and will contribute to further rebalancing the risk to the outlook for growth."

The ECB unveiled a massive stimulus package in March to boost growth and inflation but many of its measures, like cheap bank loans and corporate bond buys have yet to be implemented, indicating that market talk of further steps is premature.

The ECB is buying 80 billion euros (S$122.89 billion) of assets per month, trying to boost inflation, which has missed its target of close to 2 per cent for 3 straight years and remains below zero on sharply lower energy prices.

The asset buys are set to end in March 2017, at the earliest, and investors expect the ECB to provide guidance by the autumn about how it would proceed from then.

In its next move, the ECB starts buying corporate debt on June 8, probably starting small before ramping up as more issuer come on the market. Then it offers longer-term refinancing operations (TLTRO) towards the end of the month, giving banks access funding at zero or negative rates.

Earlier on Thursday the ECB left its rate on bank overnight deposits, now seen as its primary interest rate tool, at -0.40 per cent. The main refinancing rate, which determines the cost of credit in the economy was unchanged at 0.00 per cent while the rate on the marginal lending facility - or emergency overnight borrowing rate for banks - was held at 0.25 per cent.

REUTERS