FXStreet (Łódź) - Clemente De Lucia, Economist at BNP Paribas, doesn't expect the ECB to adjust its monetary policy in any way on Thursday, as the central bank needs more time to assess the impact of measures introduced in June.
"Although lending growth is still subdued, inflation still weak and the recovery remains vulnerable, the ECB will not embark on further actions any time soon and definitely not before having a better idea of the effects on the economy of the TLTROs."
"For the time being, their announcements just produced a moderate depreciation of the euro and a reduction of money market interest rates."
"Yet, as soon as the first two TLTROs will be conducted, the effects on longer-term interest rates will be more evident."
"Lower interest rates and the euro depreciation might boost the recovery and stimulate demand for credit."
"In March 2015, when the first credit-conditional TLTRO will be conducted, the ECB will have other elements to assess if these measures are producing the desired effects or not."
"Should credit conditions continue to decline and inflation be at uncomfortable levels at that time, then the ECB might decide to embark on further non-conventional measures."