ECB poised to Use All Tools Needed to Lift Inflation, says Rehn

The European Central Bank is poised to utilize all the necessary tools to stimulate inflation, and is closely monitoring euro’s appreciation, Governing Council member Olli Rehn said in a statement.

The ECB introduced additional fiscal stimulus to its pandemic stimulus package in December. Despite President Christine Lagarde reassuring that the bloc’s recovery is on track, the slow vaccine rollout and reinstated and extended lockdowns are creating concerns.

Currently, Euro-area inflation is -0.3% compared with a medium-term goal of just below 2%. The increase in the exchange rate in 2020 became a crucial factor to lower prices.

Rehn also said changing the inflation goal of ECB must be altered to a symmetric 2% target. He previously reasoned that such change would boost expectations after years in which inflation has stagnantly remained too low despite hefty monetary stimulus amounting to trillions of euros.