ECB Maintains Interest Rates and Guidance as Anticipated, According to Reuters

The European Central Bank (ECB) maintained interest rates at record lows on Thursday, as anticipated, in an effort to stimulate growth and inflation through accessible credit in the economy.

All 45 analysts surveyed had predicted this decision following the ECB’s prior move to lower its deposit rate further into negative territory in March. Additionally, the Bank expanded its asset purchasing program and introduced a new round of low-interest loans.

The ECB indicated that it expects its key interest rates to remain at current or lower levels for a prolonged period, extending well beyond the timeframe of its net asset purchases. The asset purchase program, set at 80 billion euros per month, is expected to continue until at least the end of March 2017 and may persist beyond that if necessary, contingent upon seeing a consistent adjustment in inflation trends aligned with its goals.

During this meeting, the ECB kept the overnight deposit rate, which is considered its primary tool for influencing interest rates, at -0.40 percent. The main refinancing rate, which influences borrowing costs across the economy, remained at 0.00 percent, while the marginal lending facility rate, used for emergency overnight borrowing by banks, stayed at 0.25 percent.

As markets await a news conference from ECB President Mario Draghi, scheduled for 1230 GMT, focus will likely shift to discussions surrounding the implications of Britain’s exit from the EU, the current status of Italian banks, and the anticipated challenges in sourcing sufficient bonds for the asset purchase program.