The ECB's latest policy decision was in part....>

ECB: The ECB's latest policy decision was in part to prevent an "unwarranted

tightening of financial conditions" with lending to the real economy becoming

constrained, Central Bank of Ireland Governor Gabriel Makhlouf told a Market

News International Connect event Thursday. 

--Noting the sharp deterioration in the outlook for growth and inflation,

Makhlouf underlined that policy was set to maintain favourable financing

conditions "for all sectors of the economy and across countries. There was

strong demand for credit given the significant liquidity issues many firms face

due to the pandemic and the Governing Council aimed at making sure funds were

able to flow through the system. 

--Although acknowledging the downward pressure on prices, Makhlouf said the

overall inflation dynamic was ambiguous due to competing effects, "which could

cause inflation to increase or decrease."

--The downturn will result in substantial economic slack, which would tend to

weaken inflation dynamics, he said, noting that would be counterbalanced by

constrained supply chains which would tend to drive prices up.