FRANKFURT (Reuters) – The European Central Bank has the flexibility to counter any undesired rise in bond yields, the bank’s vice president told a Portuguese newspaper after several policymakers called on the bank to act.
“We will have to see whether this increase in nominal yields will have a negative impact on financing conditions,” de Guindos told Público on Tuesday.
“If we reach the conclusion that it will, then we are totally open to recalibrating our programme, including the envelope of our Pandemic Emergency Purchase Programme if necessary,” he added. “We have room for manoeuvre, and we have ammunition.”
The ECB may nudge up its 2021 inflation projections at its policy meeting next week but much of this year’s rise will be temporary, so the bank is not very concerned about rising prices in the short term, de Guindos added.
(Reporting by Balazs Koranyi)
