In line with forecasts, ECB held its benchmark interest rate unchanged at 0.0%. No new measures were announced either; this is its first policy decision since the Brexit vote last June 23.
The central bank’s deposit facility rate, overall seen as its primary interest rate tool, was also maintained steady at -0.4% and marginal lending rate, or the emergency overnight borrowing rate for banks, was kept unchanged at 0.25%.
All 45 analysts surveyed by Reuters forecasted the rates hold verdict after the ECB slashed its deposit rate into the negative last March, stretched its asset buys and presented a new round of cheap loans.
The ECB Governing Council said in a note that it continues to anticipate the bank’s key interest rates to linger at present or drift lower for an extended amount of time and well past the net asset acquisitions.
Furthermore, the ECB kept the amount of its monthly quantitative easing program at an estimated 80 billion euro.
It added that its 80 billion euro per month asset purchase program is set to progress until March 2017’s end, or beyond if needed, and until the central bank foresees a stable adjustment in inflation consistent with its inflation aim.
Markets now await ECB Chief Mario Draghi’s news conference set later at 12:30 GMT or 08:30 ET. In this conference, he will talk about the impact and repercussions of Britain’s vote to leave the European Union, the condition of Italian lenders and the anticipated difficulty in searching enough bonds to buy under its asset purchase program.
Market players will watch closely of any signals of action to be taken at the September meeting when the ECB releases its latest economic projections.
Meanwhile in forex trading, the EUR/USD pair traded at 1.1019, higher from 1.1016 prior the announcement, while EUR/GBP traded up 0.8361 from 0.8360 from the aforementioned period. The euro was unchanged against the greenback at $1.106,
Elsewhere, European stock markets mostly nudged lower. Benchmark EURO STOXX 50 tumbled 0.15%, French index CAC 40 sank 0.29%, London’s FTSE 100 slid 0.40% and Germany’s DAX 30 dipped 0.02%
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