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ECB will reach QE target even in shorter first month: Draghi
[FRANKFURT] European Central Bank President Mario Draghi said he's confident that his bond-buying program will hit its targets in the first month of operation.
"We count on reaching" the target of 60 billion euros ($65 billion) though the operation only started March 9, Draghi told Italian lawmakers in Rome on Thursday. "All feedback we have from markets tell us that there are no difficulties in carrying out these operations."
The central bank started a quantitative-easing program this month that aims to buy 1.1 trillion euros of public-sector bonds by September 2016. The monthly target includes programs of asset-backed securities and covered bonds that have been under way since 2014.
The ECB said on Monday that, as of March 20, it had settled public-sector purchases of 26.3 billion euros.
While recent data point to an accelerating euro-area economy, Draghi warned that the recovery remains "cyclical" and needs to be underpinned by structural reforms.
At the same time, recent data signal that ECB stimulus is finally reaching the real economy. The central bank said on Thursday that lending to companies and households rose for a fourth month in February.
"Interest-rate reductions are being transmitted to the whole financial intermediation channel and credit contraction is receding," Draghi said in the Italian parliament. "The falling cost of financing makes investment opportunities interesting that in the past were not profitable."
While QE has already brought down sovereign yields, the single currency remains at risk from events related to Greece, where the government is in negotiations with creditors amid concern the country could run out of cash in early April.
In his comments in Rome, Draghi repeated recent calls for stronger European fiscal integration and structural reforms.
"Our union remains fragile because responsibility for reforms remain at the national level," he said. "Fiscal rules are a consequence of this, as one country's default would damage all others. I think this is clear today and I think the same principle should be applied to structural reforms."