Update Draghi: 'Very Substantial' Monpol Support Still Needed

--Adds Quotes and Context Throughout 

By Jack Duffy

     PARIS (MNI) - The Eurozone economic recovery is now firm and broad but

"very substantial" monetary policy support is still needed to bring inflation

back to its target, European Central Bank President Mario Draghi said Monday.

     "The firm economic recovery still needs to translate more convincingly into

stronger inflation dynamics," Draghi said, speaking to the European Parliament.

     "We are becoming more confident that inflation will eventually head to

levels in line with our inflation aim, but we also know that a very substantial

degree of monetary accommodation is still needed for the upward inflation path

to materialise," he said.

     Draghi repeated comments made following the Sept. 7 policy meeting the

rising euro represented "a source of uncertainty which requires monitoring."

     In response to a question, Draghi said the euro's rise was due, in part, to

an "unquestionable improvement in the economic situation of the euro area."

     On the outlook for policy, Draghi said the Governing Council would decide

later this year "on a re-calibration of our instruments that maintains the

degree of monetary support that the euro area economy still needs."

     Draghi repeated the bulk of decisions regarding a tapering of its E2.3

trillion QE program would be taken during the ECB's October meeting. In response

to a question, Draghi said there had been no discussions about changing the 33%

issue/issuer limit on what the ECB can buy. 

--MNI Paris Bureau; tel: +33 1-42-71-55-41; email: jack.duffy@marketnews.com

[TOPICS: M$X$$$,M$$EC$]