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7/25, 1:46 PM (Source: TeleTrader)
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ECB sticks with current policy, hints at rate cut

Interest rates are expected to be held "at their present or lower levels" by the end of the first half of next year but if price growth projections still "fall short of its aim," the European Central Bank vowed to act to achieve "symmetry in the inflation aim." Policymakers said on Thursday that they decided to hold benchmark borrowing costs.

The previous guidance, from early June, was for rates to be held "at their present levels" for the same period, so today's statement reveals bias toward cutting in line with signals from ECB's officials amid turbulence in manufacturing and lagging inflation.

The governing council vowed to "a highly accommodative stance of monetary policy for a prolonged period of time" and expressed determination to "adjust all of its instruments, as appropriate." It added it is possible that the so-called forward guidance would be enhanced and that it may establish a tiering scheme for bank deposits and restart net bond purchases. The refinancing rate is zero compared to 0.25% for the marginal lending facility and 0.4% under zero for deposits.

Breaking the News / IT