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Speaking after the ECB kept its main refinancing rate on hold at 0.5 per cent and decided to keep any other non-standard measures “on the shelf”, Mr Draghi said an absence of deflationary risks in the eurozone and a stock market rally were the fruits of the bank’s outright monetary transactions, or OMT scheme, announced last September.
He also contrasted how the ECB had succeeded in shrinking its balance sheet with the bond market gyrations caused by investors anticipating an end to the Federal Reserve’s measures to stimulate the economy. “The ECB hasn’t done anything to increase volatility in the markets”, Mr Draghi said. “If you think the ECB has done anything comparable to other central banks, we wouldn’t agree.”
His robust defence of OMT, which was opposed by Germany’s Bundesbank and stirred controversy in Germany, comes ahead of court hearings at the constitutional court in Germany, which is considering the legality of the scheme under Germany’s Basic Law. “The OMT has brought stability not only to the markets in Europe but also to the markets worldwide”, he said, adding that he was “absolutely confident” that the constitutional court, which will not make any ruling until later in the year, would “analyse with thoroughness, fairness and competence all the advice from all the sides”.
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