Some analysts were expecting a possible extension of the program.
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The ECB kept its deposit rate at -0.4 per cent, charging banks for parking cash overnight, and held the main refinancing rate, which determines the cost of credit in the economy, unchanged at 0.00 per cent.
The ECB’s outlook for eurozone growth was slightly more pessimistic than when forecasts were last published in June.
Draghi could indicate Thursday that the bank is ready to extend the bond-buying program. Yet, they also expect the ECB’s 80 billion euro monthly asset buys to be extended before the end of the year as they are now set to expire next March, too soon for inflation to rebound. The price of the 2.25 percent security due in August 2046 was 98 17/32. Eurozone inflation stands at 0.2%.
But the European Central Bank is widely expected to extend the quantitative easing programme beyond next March, when it is due to end.
USA and European shares fell on Thursday after ECB chief Mario Draghi played down the prospect of an increase in asset purchases at a time when concern over the impact of Brexit on the euro area mounts.
Monetary conditions have also remained broadly stable, bank lending is picking up and Germany raised the prospect of a tax cut, music to Draghi’s ears as he has often called on governments to help out.
In advance of their September meeting, European Central Bank board members emphasised that much of the large stimulus agreed on in March is only just coming into effect.
Pretet said investors’ initial reaction may be to acknowledge that “there will be less activity from the ECB and central banks in general”.
“Our priority is to implement this comprehensive package in the best possible way”, Bank of France governor Francois Villeroy de Galhau told a Frankfurt banking conference on Wednesday. But for both 2017 and 2018 the growth forecast was trimmed to 1.6% from 1.7%.
“The market was hoping for more from Draghi and he didn’t give it to them”, said Rob Haworth, senior investment strategist for U.S. Bank Wealth management in Seattle.
The UK’s vote to leave the European Union was mentioned only briefly, with Draghi commenting: “The economic recovery in the euro area is expected to be dampened by still subdued foreign demand, partly related to the uncertainties following the UK referendum outcome, the necessary balance sheet adjustments in a number of sectors and a sluggish pace of implementation of structural reforms”. The declines shrank gains for the week to 2.3 percent.
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The single currency bought $1.1246 and 114.20 yen in Tokyo, against $1.1242 and 114.36 yen in New York Wednesday when it retreated on news German August industrial production slipped 1.5 percent from July. This news story is related to Print/148820-ECB-keeps-rates-unchanged-as-Brexit-shock-fades/ – breaking news, latest news, pakistan ne.
