ECB to follow data-dependent approach for monetary restriction, says chief

By Ovunc Kutlu

ANKARA (AA) - European Central Bank (ECB) President Christine Lagarde said Thursday the institution will follow a macroeconomic data-dependent and meeting-by-meeting approach in determining the appropriate level and duration of monetary restriction.

"We are not pre-committing to a particular rate path," she told a press conference after the conclusion of the ECB's monetary policy meeting.

"In particular, our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission," she added.

Earlier in the day, the ECB's Governing Council decided to keep the three key interest rates unchanged. The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25%, 4.50% and 3.75%, respectively.

"While some measures of underlying inflation ticked up in May owing to one-off factors, most measures were either stable or edged down in June," said Lagarde. "At the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above our target well into next year."

The ECB chief said the Governing Council is determined to ensure that inflation returns to the 2% medium-term target in a timely manner, and it will keep policy rates "sufficiently restrictive for as long as necessary" to achieve this goal.