As expected ECB has left interest rates unchanged on Thursday. The ECB left its main lending rate, known as the refi rate, at 0%, while the paid-on deposits left overnight at the central bank, remains at -0.4% and the rate on the marginal lending facility was also kept at 0.25%.
The Governing council also expects that the key interest rates will remain unchanged at least till summer of 2019 and in any case ‘as long as necessary to ensure the continued sustained convergence of inflation close to 2% over medium term’.
Regarding non-standard monetary policy measures, ECB also reiterated its plan to scale down the size of its bond buying programme next month and end purchases in December. The ECB plans to reduce the size of its monthly bond purchases from 30 billion euros a month to 15 billion euros in October, completing purchases in December.
But added that the wrap-up would “be subject to incoming data confirming the medium-term inflation outlook” and to reinvest the principal payments from maturing securities “for an extended period of time after Dec 31” after the bond-buying program ends.