The ECB leaves rates unchanged. QE unchanged as well – language still dovish.
All eyes turn to Draghi.
- ECB LEAVES DEPOSIT FACILITY RATE UNCHANGED AT -0.4%
- ECB LEAVES MAIN REFINANCING RATE UNCHANGED AT 0%
- ECB LEAVES MARGINAL LENDING FACILITY UNCHANGED AT 0.25%
The euro knee-jerks lower as traders were probably hoping against hope for a surprise…
At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.
Regarding non-standard monetary policy measures, the Governing Council confirms that the net asset purchases, at the new monthly pace of €60 billion, are intended to run until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. The net purchases will be made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase programme.
If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the programme in terms of size and/or duration.