ECB Leaves QE, Forward Guidance Unchanged
26 Abril 2018 - 3:34AM
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The European Central Bank left its key interest rates, asset
purchases and forward guidance unchanged on Thursday, amid
softening growth momentum in the euro area.
The Governing Council, led by ECB President Mario Draghi, left
the key interest rates unchanged after the policy session in
Frankfurt, in line with economists' expectations.
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.
The bank also confirmed that the net asset purchases, at the
current monthly pace of EUR 30 billion, will run until the end of
September 2018, 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.
In the March meeting, the ECB tweaked the forward guidance by
dropping the easing bias on asset purchases, after a clear divide
in the Governing Council surfaced over the past few policy
sessions.
Draghi is set to hold his press conference at 8.30 am ET in
Frankfurt, when reporters are expected to quiz him regarding the
trade war concerns and softening growth in the region.
"Given the apparent softening of economic growth since the ECB's
last meeting, it is no surprise that the Bank has chosen to keep
its policy and forward guidance unchanged," Capital Economics
economist Jennifer McKeown said.
"But we expect President Draghi to hint at the press conference
that a gradual normalization is still to come."
Interest rates will be on hold until well past the horizon of
net asset purchases, which likely implies a hike in September 2019
at the earliest, the economist added.
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