FRANKFURT, March 4 (Reuters) - The European Central Bank kept interest rates steady at a record low of 1.0 percent at its Governing Council meeting on Thursday and detailed plans to unwind more of its emergency lending.
Below are key points from the ECB's policy statement compared with previous months. Capitals have been added by Reuters for emphasis.
OPENING PARAGRAPH:
-- MARCH 4 --
'The current rates REMAIN APPROPRIATE.'
'Price developments are expected to remain SUBDUED OVER THE POLICY-RELEVANT HORIZON.'
'The economic RECOVERY in the euro area is ON TRACK, although it is likely to remain UNEVEN. Overall, the Governing Council expects the euro area economy to grow at a MODERATE PACE IN 2010, in an environment marked by continued UNCERTAINTY.'
' Inflation expectations remain firmly anchored.'
-- FEB 4 --
'The current rates REMAIN APPROPRIATE.'
'Price developments are expected to remain SUBDUED OVER THE POLICY-RELEVANT HORIZON.'
'The Governing Council expects the euro area economy to GROW AT A MODERATE PACE IN 2010. The recovery process is likely to be UNEVEN and the outlook remains subject to UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
-- JAN 14 --
'The current rates REMAIN APPROPRIATE.'
'Price developments are expected to remain SUBDUED OVER THE POLICY-RELEVANT HORIZON.
'Some of the factors supporting the growth in real GDP are of a TEMPORARY NATURE. Overall, the Governing Council expects the euro area economy to GROW AT A MODERATE PACE IN 2010, recognising that the recovery process is likely to be UNEVEN and that the outlook remains subject to UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
ECONOMIC ANALYSIS: GDP
-- MARCH 4 --
'A number of special factors are at play, including adverse weather conditions in parts of the euro area.'
'The Governing Council expects real GDP growth to remain MODERATE IN 2010, owing to the ongoing process of BALANCE SHEET ADJUSTMENT in various sectors and the expectation that the low capacity utilisation is likely to DAMPEN INVESTMENT and that consumption is being dampened by WEAK LABOUR MARKET PROSPECTS.'
'The risks to this outlook as BROADLY BALANCED.'
-- FEB 4 --
'Activity is likely to be ADVERSELY AFFECTED by the ongoing process of BALANCE SHEET ADJUSTMENT. In addition, low capacity utilisation rates are likely to dampen investment, and unemployment in the euro area is expected to increase somewhat further, thereby LOWERING CONSUMPTION GROWTH.'
'The risks to this outlook as BROADLY BALANCED.'
-- JAN 14 --
'A number of the supporting factors are of a TEMPORARY NATURE.'
'Low capacity utilisation rates are likely to DAMPEN INVESTMENT, and unemployment in the euro area is expected to increase somewhat further, thereby LOWERING CONSUMPTION GROWTH.
'The risks to this outlook as BROADLY BALANCED.' ------------------------------------------------------------
INFLATION
-- MARCH 4 --
'Inflation is expected to be around 1 percent in the near term and to remain moderate over the policy-relevant horizon.'
'In line with a slow recovery in domestic and foreign demand, overall PRICE, COST AND WAGE DEVELOPMENTS are expected to stay SUBDUED.'
'Risks to this outlook remain BROADLY BALANCED.'
-- FEB 4 --
'Inflation is expected to be around 1 percent in the near term and to remain moderate over the policy-relevant horizon.
'In line with a slow recovery in demand in the euro area and elsewhere, overall PRICE, COST AND WAGE DEVELOPMENTS are expected to stay SUBDUED.'
'Risks to this outlook remain BROADLY BALANCED.'
-- JAN 14 --
'Inflation is expected to remain AROUND 1 PERCENT in the near term. Looking further ahead, inflation is expected to remain MODERATE OVER THE POLICY-RELEVANT HORIZON, with overall price, cost and wage developments staying subdued.'
'Risks to this outlook remain BROADLY BALANCED.' ------------------------------------------------------------
MONETARY ANALYSIS
-- MARCH 4 --
'Assessment that the underlying pace of MONETARY EXPANSION IS MODERATE and that, in the medium term, the inflationary pressures associated with monetary developments are low. The growth of M3 and LOANS TO THE PRIVATE SECTOR is likely to remain WEAK also in the coming months.'
-- FEB 4 --
'Assessment of a MODERATE UNDERLYING PACE of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term.'
'Looking ahead, M3 and credit growth is likely to remain weak for some time to come.'
'Growth in loans can be expected to REMAIN WEAK over the months to come.'
-- JAN 14 --
'The concurrent declines ... support the assessment of a decelerating underlying pace of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term. Looking ahead, M3 and credit growth are likely to remain VERY WEAK OR NEGATIVE for some time to come.'
'Banks should use the improved funding conditions to strengthen further their capital bases.' -----------------------------------------------------
NON-STANDARD MEASURES
-- MARCH 4 --
'We decided to continue conducting both the MAIN REFINANCING OPERATIONS and the refinancing operations with a maturity of ONE MAINTENANCE PERIOD as FIXED RATE TENDER PROCEDURES with FULL ALLOTMENT for as long as necessary - and AT LEAST UNTIL the end of this year's ninth maintenance period on 12 OCTOBER 2010.'
'Return to VARIABLE RATE TENDER PROCEDURES in the regular THREE-MONTH ... operations (LTROs), starting with the operation to be allotted on 28 APRIL 2010. Allotment amounts in these operations will be set with the aim of ENSURING SMOOTH CONDITIONS IN MONEY MARKETS and AVOIDING any significant SPREADS between bid rates and the prevailing MRO rate.'
'The SIX-MONTH LTRO to be allotted on 31 March 2010 at the AVERAGE MINIMUM BID RATE OF THE mroS OVER THE LIFE OF THIS OPERATION.'
-- FEB 4 --
'We will CONTINUE OUR ENHANCED CREDIT SUPPORT to the banking system, while taking into account the ONGOING IMPROVEMENT in financial market conditions and AVOIDING DISTORTIONS associated with maintaining non-standard measures for too long.'
'The liquidity provided will be ABSORBED WHEN NECESSARY.'
-- JAN 14 --
'We will CONTINUE OUR ENHANCED CREDIT SUPPORT to the banking system, while taking into account the ONGOING IMPROVEMENT in financial market conditions and AVOIDING DISTORTIONS associated with maintaining non-standard measures for too long.'
'The liquidity provided will be absorbed when necessary.' (Reporting by Marc Jones; editing by Patrick Graham) Keywords: ECB/RATES STATEMENT (marc.jones@thomsonreuters.com; +49 (0)69 7565 1219; reuters messaging: marc.jones.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Below are key points from the ECB's policy statement compared with previous months. Capitals have been added by Reuters for emphasis.
OPENING PARAGRAPH:
-- MARCH 4 --
'The current rates REMAIN APPROPRIATE.'
'Price developments are expected to remain SUBDUED OVER THE POLICY-RELEVANT HORIZON.'
'The economic RECOVERY in the euro area is ON TRACK, although it is likely to remain UNEVEN. Overall, the Governing Council expects the euro area economy to grow at a MODERATE PACE IN 2010, in an environment marked by continued UNCERTAINTY.'
' Inflation expectations remain firmly anchored.'
-- FEB 4 --
'The current rates REMAIN APPROPRIATE.'
'Price developments are expected to remain SUBDUED OVER THE POLICY-RELEVANT HORIZON.'
'The Governing Council expects the euro area economy to GROW AT A MODERATE PACE IN 2010. The recovery process is likely to be UNEVEN and the outlook remains subject to UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
-- JAN 14 --
'The current rates REMAIN APPROPRIATE.'
'Price developments are expected to remain SUBDUED OVER THE POLICY-RELEVANT HORIZON.
'Some of the factors supporting the growth in real GDP are of a TEMPORARY NATURE. Overall, the Governing Council expects the euro area economy to GROW AT A MODERATE PACE IN 2010, recognising that the recovery process is likely to be UNEVEN and that the outlook remains subject to UNCERTAINTY.'
'Medium to longer-term inflation expectations remain FIRMLY ANCHORED.'
ECONOMIC ANALYSIS: GDP
-- MARCH 4 --
'A number of special factors are at play, including adverse weather conditions in parts of the euro area.'
'The Governing Council expects real GDP growth to remain MODERATE IN 2010, owing to the ongoing process of BALANCE SHEET ADJUSTMENT in various sectors and the expectation that the low capacity utilisation is likely to DAMPEN INVESTMENT and that consumption is being dampened by WEAK LABOUR MARKET PROSPECTS.'
'The risks to this outlook as BROADLY BALANCED.'
-- FEB 4 --
'Activity is likely to be ADVERSELY AFFECTED by the ongoing process of BALANCE SHEET ADJUSTMENT. In addition, low capacity utilisation rates are likely to dampen investment, and unemployment in the euro area is expected to increase somewhat further, thereby LOWERING CONSUMPTION GROWTH.'
'The risks to this outlook as BROADLY BALANCED.'
-- JAN 14 --
'A number of the supporting factors are of a TEMPORARY NATURE.'
'Low capacity utilisation rates are likely to DAMPEN INVESTMENT, and unemployment in the euro area is expected to increase somewhat further, thereby LOWERING CONSUMPTION GROWTH.
'The risks to this outlook as BROADLY BALANCED.' ------------------------------------------------------------
INFLATION
-- MARCH 4 --
'Inflation is expected to be around 1 percent in the near term and to remain moderate over the policy-relevant horizon.'
'In line with a slow recovery in domestic and foreign demand, overall PRICE, COST AND WAGE DEVELOPMENTS are expected to stay SUBDUED.'
'Risks to this outlook remain BROADLY BALANCED.'
-- FEB 4 --
'Inflation is expected to be around 1 percent in the near term and to remain moderate over the policy-relevant horizon.
'In line with a slow recovery in demand in the euro area and elsewhere, overall PRICE, COST AND WAGE DEVELOPMENTS are expected to stay SUBDUED.'
'Risks to this outlook remain BROADLY BALANCED.'
-- JAN 14 --
'Inflation is expected to remain AROUND 1 PERCENT in the near term. Looking further ahead, inflation is expected to remain MODERATE OVER THE POLICY-RELEVANT HORIZON, with overall price, cost and wage developments staying subdued.'
'Risks to this outlook remain BROADLY BALANCED.' ------------------------------------------------------------
MONETARY ANALYSIS
-- MARCH 4 --
'Assessment that the underlying pace of MONETARY EXPANSION IS MODERATE and that, in the medium term, the inflationary pressures associated with monetary developments are low. The growth of M3 and LOANS TO THE PRIVATE SECTOR is likely to remain WEAK also in the coming months.'
-- FEB 4 --
'Assessment of a MODERATE UNDERLYING PACE of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term.'
'Looking ahead, M3 and credit growth is likely to remain weak for some time to come.'
'Growth in loans can be expected to REMAIN WEAK over the months to come.'
-- JAN 14 --
'The concurrent declines ... support the assessment of a decelerating underlying pace of monetary expansion and LOW INFLATIONARY PRESSURES over the medium term. Looking ahead, M3 and credit growth are likely to remain VERY WEAK OR NEGATIVE for some time to come.'
'Banks should use the improved funding conditions to strengthen further their capital bases.' -----------------------------------------------------
NON-STANDARD MEASURES
-- MARCH 4 --
'We decided to continue conducting both the MAIN REFINANCING OPERATIONS and the refinancing operations with a maturity of ONE MAINTENANCE PERIOD as FIXED RATE TENDER PROCEDURES with FULL ALLOTMENT for as long as necessary - and AT LEAST UNTIL the end of this year's ninth maintenance period on 12 OCTOBER 2010.'
'Return to VARIABLE RATE TENDER PROCEDURES in the regular THREE-MONTH ... operations (LTROs), starting with the operation to be allotted on 28 APRIL 2010. Allotment amounts in these operations will be set with the aim of ENSURING SMOOTH CONDITIONS IN MONEY MARKETS and AVOIDING any significant SPREADS between bid rates and the prevailing MRO rate.'
'The SIX-MONTH LTRO to be allotted on 31 March 2010 at the AVERAGE MINIMUM BID RATE OF THE mroS OVER THE LIFE OF THIS OPERATION.'
-- FEB 4 --
'We will CONTINUE OUR ENHANCED CREDIT SUPPORT to the banking system, while taking into account the ONGOING IMPROVEMENT in financial market conditions and AVOIDING DISTORTIONS associated with maintaining non-standard measures for too long.'
'The liquidity provided will be ABSORBED WHEN NECESSARY.'
-- JAN 14 --
'We will CONTINUE OUR ENHANCED CREDIT SUPPORT to the banking system, while taking into account the ONGOING IMPROVEMENT in financial market conditions and AVOIDING DISTORTIONS associated with maintaining non-standard measures for too long.'
'The liquidity provided will be absorbed when necessary.' (Reporting by Marc Jones; editing by Patrick Graham) Keywords: ECB/RATES STATEMENT (marc.jones@thomsonreuters.com; +49 (0)69 7565 1219; reuters messaging: marc.jones.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.