Reuters: Economic News: ECB sees risks to economic recovery

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ECB sees risks to economic recovery Apr 4th 2012, 12:48 FRANKFURT | Wed Apr 4, 2012 8:48am EDT FRANKFURT (Reuters) - There is a risk economic stabilization in the euro zone could falter while prices are not likely to fall below their 2 percent inflation target until next year, the European Central Bank said on Wednesday. "The economic outlook remains subject to downside risks," ECB President Mario Draghi said, reading the ECB's opening statement after the central bank held interest rates at a record-low of 1.0 percent. "Downside risks to the economic outlook prevail," he said. The ECB kept its economic assessment largely similar to the previous month after several months of tweaking the language in a brighter direction. Draghi also said the Governing Council views medium-term inflation risks as balanced, but with more danger of a rise than a fall this year. The central bank aims to keep inflation at just below 2 percent, but has overshot the target for 16 months in a row. The opening statement also said the ECB's non-standard measures, which include it handing banks 1 trillion euros in 3-year loans, are temporary, but made no mention of when they would be phased out. Bundesbank President Jens Weidmann has pushed for the ECB to start discussing an exit from those measures. (Reporting by Sakari Suoninen. Editing by Jeremy Gaunt.) Link this Share this Digg this Email Reprints

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