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ECB September Monthly Report: Russian-Ukrainian tensions could dampen Eurozone growth

FXStreet (Łódź) - The ECB September Monthly Report reiterates the information included in this month's monetary policy statement in which the Governing Council announced rate cuts and the launching of simple asset-backed securities and covered bonds purchases in October.

"The newly decided measures, together with the targeted longer-term refinancing operations which will be conducted shortly, will have a sizeable impact on the Eurosystem balance sheet," the report states.

"The decisions of 4 September 2014, together with the other measures in place, were taken with a view to underpinning the firm anchoring of medium to long-term inflation expectations, in line with the Governing Council’s aim of maintaining inflation rates below, but close to, 2%."

The ECB sees a gradual increase in CPI later in the year and assures that it will closely monitor risks for the inflation outlook, and act accordingly. The risks include geopolitical tensions, exchange rate developments and the impact of the fresh measures on the Eurozone economy. It also points to the Russian-Ukrainian conflict as possibly the main factor responsible for dampening Eurozone growth.

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