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ECB's Draghi dispels doubts about divisions within Governing Council

FXStreet (Łódź) - Following ECB's announcement of the decision to keep rates at record low levels in November meeting Mario Draghi warned that elevated unemployment continued to be a drag on the Eurozone economic recovery and that geopolitical tensions could hurt investment.

Therefore, the Governing Council will closely monitor the developments and act if necessary. The two contingencies for implementing further measures include the deterioration of the price outlook or a worsening of inflation expectations. The ECB staff is already conducting further studies on the possible additional measures, Draghi signaled.

Meanwhile, the planned ABS purchases would begin soon and last at least until 2007. The asset purchases as well as the TLTRO program should have a significant impact on the central bank's balance sheet, which is expected to move towards early 2012 levels.

Furthermore, Eurozone domestic demand should be supported by structural reforms and lower energy prices. Global recovery has a positive impact on exports. But growth momentum in the area is still weakening and inflation should remain at low levels for over the coming months and then increase gradually during 2015-16. Draghi assured however that the measures implemented so far will contribute to bringing CPI closer to target.

The fact that the ECB chief emphasized several times during the conference that the decisions have been taken unanimously by the governing council, dispels doubts about a possible mutiny of the national central bank heads against him, prompted by an Reuters article published on Wednesday.

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