FRANKFURT (Reuters) – A series of monetary policy measures announced last month will help accelerate inflation and support bank credit, but the European Central Bank stands ready to create money in the future if needed, said the entity’s president on Thursday, Mario Draghi.

The ECB kept its benchmark interest rate unchanged at 0.15 percent after slashing it to a record low last month, when it also pushed deposit rates into negative territory for the first time, forcing banks to abandon their money from one day to the next successively. to encourage them to lend to companies.

Measures announced in June also included extending the duration of unlimited cheap liquidity for banks until the end of 2016 and offering a four-year loan plan.

Draghi said the steps taken last month had further loosened monetary policy in the eurozone.

“Currency operations to be carried out in the coming months will add to relief and support bank lending,” Draghi said at a news conference after the ECB meeting.

“To the extent that our actions have an impact on the economy, they will contribute to a return of the inflation rate to a level close to 2 percent,” he added.

Eurozone inflation held at 0.5 percent last month, well below the ECB’s target, but still below 2 percent and in what Draghi called the “danger zone.” ”.

Draghi said the ECB’s Governing Board agreed they were willing to launch quantitative easing – essentially creating money to buy government or private bank debt to keep borrowing costs low and increase spending – if inflation slowed further.

The official added that risks to the economic recovery remain negative.

“The Governing Council is unanimous in its commitment to also use unconventional instruments within its mandate if necessary to address new risks from prolonged periods of low inflation,” Draghi said.

Few analysts expect that to be possible by the end of this year. The central bank said the measures taken last month may take a year to fully implement.

“After the rate cut in June, they will wait… maybe until the end of the year to assess the impact that will have,” said Berenberg bank economist Christian Schulz.

LOAN

Banks that failed to make loans after receiving cheap credit from the ECB’s new financing program will have to repay the money, the ECB said.

“If banks do not provide evidence that they have generated net credit against the benchmark, they will have to pay them back,” Draghi said at a news conference after the ECB’s decision was announced.

The central bank is eager to avoid a repeat of what happened in previous rounds of cheap financing, used mostly by eurozone banks to buy debt from their governments.

Providing general details about the new TLTRO loan program, Draghi said banks can participate individually or in groups if certain criteria are met.

“Banks can attract additional allocations in this program if they generate eligible loans in the first two years of this program above the standard provided,” said Draghi.

The ECB chairman also reported that the central bank will start meeting every six weeks instead of once a month starting next year, mimicking the frequency of the US Federal Reserve’s monetary policy meetings.

In addition, the ECB will start publishing the minutes of its regular meetings, just like the Fed and the Bank of England do.