ECB leaves key rates, bond-buy­ing scheme un­changed

The Sun (Malaysia) - - SUNBIZ -

FRANK­FURT: The Euro­pean Cen­tral Bank (ECB) kept its key in­ter­est rates at record lows at its pol­icy meet­ing yes­ter­day, as calls grew for pres­i­dent Mario Draghi to shed light on his stim­u­lus plans.

The ECB’s gov­ern­ing coun­cil voted, as ex­pected, to keep the bench­mark “refi” re­fi­nanc­ing rate at an all-time low of zero per­cent, a spokesman said.

It also held the rate on its mar­ginal lend­ing fa­cil­ity un­changed at 0.25% and the rate on the de­posit fa­cil­ity steady at mi­nus 0.40% – mean­ing banks have to pay to park their excess cash with the ECB.

“The gov­ern­ing coun­cil con­tin­ues to ex­pect the key ECB in­ter­est rates to re­main at present or lower lev­els for an ex­tended pe­riod of time,” the ECB said in a state­ment.

Pol­i­cy­mak­ers made no changes to the ECB’s 80 bil­lion (RM368 bil­lion) a month bond-buy­ing scheme de­signed to en­cour­age spend­ing and in­vest­ment. “The gov­ern­ing coun­cil con­firms that the monthly as­set pur­chases of 80 bil­lion are in­tended to run un­til the end of March 2017, or beyond, if nec­es­sary,” it said.

At­ten­tion now turns to Draghi’s press con­fer­ence, where in­vestors will be look­ing for clues about the bank’s next stim­u­lus moves fol­low­ing spec­u­la­tion that it may wind down the so-called “quan­ti­ta­tive eas­ing” bond-buy­ing scheme. The ECB strongly de­nied the “ta­per­ing” re­port but mar­kets were spooked none­the­less.

Faced with slug­gish growth and stub­bornly low in­fla­tion, most an­a­lysts ac­tu­ally ex­pect the ECB to ex­tend its bond-buy­ing scheme beyond its March dead­line rather than end it. – AFP

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