ECB keeps policy, guidance unchanged
[FRANKFURT] The European Central Bank reaffirmed its ultra-easy policy stance on Thursday, promising to keep rates steady until after the end of bond buys and maintaining a pledge to increase the purchases, if necessary.
The ECB kept rates at record lows, confirmed that monthly bond purchases would be reduced to 30 billion euros(S$47.8 billion) a month from January and said it stood ready to expand or lengthen the bond buys if the inflation outlook worsened.
"If the outlook becomes less favourable, 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," it said in a statement.
With the ECB deciding in October to extend monthly bond buys by nine months while cutting purchases to 30 billion euros from 60 billion euros, economist polled by Reuters expected the bank to chart a steady course, keeping a lid on any debate on its next move.
ECB President Mario Draghi will later unveil updated economic projections, including the bank's initial 2020 forecasts.
Policymakers have already said that growth projections are likely to be raised while higher oil prices and a relatively stable euro would suggest a steady or moderately higher inflation path.
With Thursday's decision, the ECB's rate on bank overnight deposits, which is currently its primary interest rate tool, remains at -0.40 per cent.
The main refinancing rate, which determines the cost of credit in the economy, remained unchanged at 0.00 per cent while the rate on the marginal lending facility - the emergency overnight borrowing rate for banks - remains at 0.25 per cent.
"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 added, repeating its long-standing guidance on rates.
REUTERS
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