Mario Draghi

  • The European Central Bank left monetary policy unchanged on Thursday in a widely anticipated move.
  • It was always highly unlikely that any policy changes would occur, and any movement would have given a major shock to financial markets.
  • ECB President Mario Draghi will speak to the media at 1.30 p.m. GMT (8.30 a.m. ET)

The European Central Bank left monetary policy unchanged on Thursday in a move widely anticipated by the financial markets.

That means a deposit rate of -0.4%, a base interest rate of 0.0%, and a quantitative easing programme of €30 billion per month.

“The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases,” the central bank said in a statement.

It was always highly unlikely that any policy changes would occur, and any movement would have given a major shock to financial markets.

Investors are now waiting for President Mario Draghi’s news conference for clues about when and how the bond stimulus might end. The bank decided in October to reduce the purchases to €30 billion a month from €60 billion and to extend them at least until September, or longer if necessary.

It is widely expected to announce a further lowering of its monthly purchases at some point in 2018, although when that will be remains unclear.

While policy changes are unlikely, investors will be keenly watching Draghi when he speaks to the media at 1.30 p.m. GMT. It is thought that Draghi may strike a dovish tone, despite the eurozone’s rampant recent growth, in an effort to subdue the rally seen in the euro in recent months.

The single currency hit a fresh three-year high on Thursday, and there are worries that continuing appreciation could dampen inflation and endanger the work done by years of unprecedented stimulus.

Join the conversation about this story »

NOW WATCH: A crypto expert explains the difference between the two largest cryptocurrencies in the world: bitcoin and Ethereum