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ECB holds interest rates at record-low; markets await Draghi

Published 07/21/2016, 07:46 AM
ECB keeps rates unchanged, avoids new policy measures
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Investing.com – As markets expected, the European Central Bank (ECB) made no changes to its record-low interest rates and announced no new measures on Thursday in what was its first policy decision since the U.K. decided to leave the European Union.

The ECB left its benchmark interest rate unchanged at a record-low 0.0%, in line with forecasts.

The central bank also held its deposit facility rate steady at -0.4% and its marginal lending rate remained at 0.25%.

The Governing Council noted in the press release that it continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.

Additionally, the ECB also kept the size of its monthly quantitative easing program at approximately €80 billion.

The euro zone monetary authority repeated that those monthly asset purchases are "intended to run until the end of March 2017, or beyond, if necessary, and in any case until it sees a sustained adjustment in the path of inflation consistent with its inflation aim."

After the decision, traders looked ahead to ECB president Mario Draghi’s press conference at 13:30GMT, or 8:30AM ET.

Market participants will pay close attention to any hints of action to be taken at the September meeting when ECB presents its updated economic forecasts.

EUR/USD was trading at 1.1019 from around 1.1016 ahead of the announcement, while EUR/GBP was at 0.8361 from 0.8360 earlier.

Meanwhile, European stock markets were mostly lower. The benchmark Euro Stoxx 50 fell 0.15%, France's CAC 40 lost 0.29%, Germany's DAX slipped 0.02%, while London’s FTSE 100 shed 0.40%.

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