The European Central Bank (ECB) announced today that it would hold its key interest rates unchanged. The main refinancing rate remains at 0.00%, the marginal lending facility rate at 0.25%, and the deposit facility rate at -0.40%.
In a press conference following the decision, ECB President Mario Draghi reiterated the central bank’s commitment to maintaining its accommodative monetary policy stance. He emphasized that while the Eurozone economy is showing signs of improvement, underlying inflation pressures remain subdued.
Draghi noted that the ECB would continue to monitor economic developments closely and is prepared to use all available instruments within its mandate to ensure that inflation converges towards its target of close to, but below, 2% over the medium term.
Analysts interpreted the ECB’s decision and Draghi’s comments as a signal that the central bank is in no hurry to begin tapering its asset purchase program, which is currently scheduled to run until at least December 2017.
Key takeaways from the ECB’s announcement:
- Interest rates remain unchanged.
- Accommodative monetary policy to continue.
- Inflation remains a key concern.
- Asset purchases to continue at current pace.
The ECB’s cautious approach reflects concerns about the fragility of the Eurozone’s economic recovery and the potential impact of political uncertainty in the region.
