While incoming data suggest the euro area will see a strong rebound in the third quarter of 2020 from the coronavirus-driven recession, the strength of the recovery remains very uncertain, as well as uneven and incomplete, said the head of the European Central Bank (ECB) on Monday.
“The strength of the recovery in euro area has been continuing to be highly dependent on the future evolution of the pandemic and the success of containment policies,” Christine Lagarde said in an address to the Franco-German Assembly in Frankfurt, Germany.
At the same time, she stressed, the uncertainty of the current environment requires a very careful assessment of the incoming information, including developments in the exchange rate and their implications for the medium-term inflation outlook.
“The Governing Council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry,” she said.
She added that policymakers should create the necessary conditions for the financial sector to do what it does best: allocate capital where it is most needed.
“If the right actions are taken now, this crisis can be an opportunity for us to create the conditions for more inclusive, greener, and more digital growth,” she concluded.
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