The European Central Bank left its key interest rates and its plan to continue its monthly asset purchases at half its current size from January, unchanged on Thursday and reiterated that the rates will remain at their present levels well past the life of the stimulus.
The Governing Council, led by ECB President Mario Draghi, left the key interest rates unchanged after the conclusion of the final policy-session for this year, in Frankfurt.
The main refi rate is currently at a record low zero percent and the deposit rate at -0.40 percent. The marginal lending facility rate is 0.25 percent.
“The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases,” the ECB reiterated.
In the previous session in October, the bank decided to halve the size of its monthly asset purchases to EUR 30 billion at the start of next year and to continue till September 2018 or beyond.
The bank confirmed this decision on Thursday and reiterated that they will continue until there is a sustained adjustment in the path of inflation consistent with the bank’s inflation aim of ‘below, but close to 2 percent’.
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 APP in terms of size and/or duration.
The ECB also said that it will reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary. Further, the bank said this will contribute both to favourable liquidity conditions and to an appropriate monetary policy stance.
The material has been provided by InstaForex Company – www.instaforex.com
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