The main refinancing rate, which determines the cost of credit in the economy was unchanged at 0.00 per cent while the rate on the marginal lending facility – or emergency overnight borrowing rate for banks – remains at 0.25 per cent.
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“Over the coming months, when we have more information, we will be in a better position to reassess the underlying macroeconomic conditions, the likely paths of inflation and growth, and the risks around those paths”, Draghi said.
The euro area’s PMIs cooled in July but remained above the 50 level that signals expansion, showing resilience in the immediate aftermath of the Brexit vote.
In the build-up to the policy decision, speculation had grown that the ECB’s €80 billion (RM357.5 billion) a month quantitative-easing programme would be fine-tuned.
There has been talk the European Central Bank could make bigger changes such as a shift to buying bonds in line with a country’s debt rather than the size of its economy.
Furthermore, demand for loans is also increasing, the survey showed.
Indeed, the euro EUR= and German yields 0#DEBMK= were broadly unchanged late on Thursday with little volatility during Draghi’s news conference.
“This was because the large liquidity that was abundant and the preparation that all central banks have undertaken before, ensuring liquidity lines would be available and certainly the accommodative monetary policies undertaken by all central banks at the present time”, Draghi said.
Gold futures for August delivery rose 0.9 percent to settle at $1,331 an ounce at 1:39 p.m. on the Comex in NY.
Draghi said today: “The longer we have this in place, the less functioning will be the banking sector – and less effective the banks will be at transmitting our monetary policy”.
The FTSE 100 closed down by 29.1 points, at 6,699.89, as the European Central Bank said that it planned to hand the euro-zone some stimulus if the Brexit vote was to start hampering economic growth.
Italy is trying to find a way to recapitalise some lenders without burdening subordinated bondholders – many of whom are ordinary families – but also without falling foul of European Commission rules on state aid.
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“There was no smoke from the ECB’s gun as the bank has chose to hold its fire as expected”, said analysts at trading firm ThinkMarkets.
