The European Central Bank has left key interest rates and its QE asset purchasing scheme unchanged. The move was largely expected as analysts said the bank needed to save some monetary ammunition for a December meeting.
The ECB held its key refinancing rate at a record-low level of 0 percent on Thursday, where it΄s been since March. It also left its deposit rate at -0.4 percent and its marginal lending rate at 0.25 percent.
The bank also promised to keep its 80 billion euro ($90.4 billion) monthly asset purchases in place until at least next March. ECB President Mario Draghi said the central bank for the eurozone left its options open for extending the program even further in case consumer prices keep failing to go up.
“The Governing Council tasked the relevant committees [with the ECB] to evaluate the options that ensure a smooth implementation of our purchase program,” he told a news conference after the policy-making council meeting.
So far, the bank΄s decisions to offer free credit to banks, drop interest rates and print trillions of extra euros haven΄t had the desired effect of getting inflation to just under 2 percent. At 0.2 percent, inflation remains well below the ECB target and is likely to stay below that level until at least 2018.
Draghi also upgraded the ECB΄s eurozone 2016 growth forecast to 1.7 percent from 1.6 percent this year, but downgraded it to 1.6 percent from 1.7 percent for both 2017 and 2018. Forecasts for a modest takeoff in inflation to 1.2 percent next year and 1.6 percent in 2018 were barely changed.
“For the time being, the changes are not substantial to warrant a decision to act. We see that our monetary policy is effective,” he said.
Sources: cjc/uhe (dpa, Reuters)
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