Yahoo Finance ECB Holds Rates Steady and Leaves Tapering Plans Unchanged
Investing.com – The European Central Bank acted as expected on Thursday by keeping interest rates unchanged.
Specifically, the ECB left its benchmark interest rate unchanged at 0.0%.
Furthermore, the central bank also coincided with forecasts by holding its deposit facility rate steady at -0.4% and leaving its marginal lending rate at 0.25%.
“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 statement repeated.
The ECB also reiterated that its plans to begin tapering its asset purchase program (APP) in January remain unchanged. Specifically, the ECB repeated that it will reduce monthly purchases from the current €60 billion ($71 billion) to €30 billion ($35.5 billion) and will extend those purchases to “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 yet another repeat of the last decision, the statement confirmed that, "if the outlook becomes less favorable, 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".
Traders now look ahead to ECB president Mario Draghi’s press conference at 8:30AM ET (13:30GMT) to see he will offer further clues on monetary policy for the euro zone in the coming year.
After the announcement and ahead of Draghi, EUR/USD was trading at 1.1831 from around 1.1832 ahead of the release, while EUR/GBP was unchanged at 0.8811.
Meanwhile, European stock markets traded mostly lower. The benchmark Euro Stoxx 50 fell 0.47%, France's CAC 40 lost 0.26%, Germany's DAX shed 0.68%, while London’s FTSE 100 traded down 0.24%.
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