You are here
ECB keeps policy, guidance unchanged
[FRANKFURT] The European Central Bank reaffirmed its ultra-easy policy stance on Thursday, promising to keep rates steady until well after the end of its bond buys and maintaining a pledge to boost the purchases, if necessary.
It kept rates at record lows, confirmed that monthly bond purchases would continue at 30 billion euros (S$48.6 billion) a month until the end of September, and said it stood ready to expand or lengthen its asset-purchase programme if the inflation outlook worsens.
While a decision to keep policy on hold was in line with consensus expectations, some had envisaged a tweak in the ECB's language after policymakers signalled in minutes of the December meeting that a revision to guidance could be needed in "early" 2018.
"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 asset purchase programme (APP) in terms of size and/or duration," the ECB said in a statement.
With Thursday's decision, the ECB's rate on bank overnight deposits, which is currently its primary interest rate tool, remains at -0.40 percent.
The main refinancing rate, which determines the cost of credit in the economy, is unchanged at 0.00 percent 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.