European Central Bank policymakers gathering on Thursday were split on their next policy move as a stronger-than-expected rise in the euro gets in the way of their careful exit from years of aggressive stimulus, sources close to the matter told Reuters.
The ECB reaffirmed its easy policy of massive bond purchases and ultra low-rates on Thursday despite an increasingly upbeat assessment of the economy.
Rate setters had been working on the assumption of making a change to their policy message in March to signal that they were preparing to phase out their 2.55 trillion euro ($3.18 trillion) money-printing program later in the year.
But a surge in the euro EUR= to three-year highs against the U.S. dollar in recent days is making their life harder by threatening to curb the recovery in euro zone inflation.
The euro rise has been fueled by stronger-than-expected growth in the euro zone but also comments by a top U.S. policymaker in support of a weaker dollar.
Some policymakers still want to discuss dropping in March a pledge to ramp up their bond purchases if needed, the three sources on or close to the Governing Council said.
This token change, a concession to the members of the Governing Council who have been calling for months for an end to bond-buying, would then pave the way for bolder moves later in the year.
But other policymakers, taken aback by the euro move, felt that it was too early to make any commitment at Thursday’s meeting and want to reassess the whole situation in March
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