ECB keeps interest rates and deposit facility unchanged, as expected
Updated : 12:45
The European Central Bank (ECB) decided to keep interest rates and the deposit facility rate at 0.05% and -0.20%, respectively, as predicted by analysts.
The market is now looking out to see if ECB President Mario Draghi drops any hints on the prospects of full-blown quantitative easing (QE) at the press conference at 1:30 London time.
Draghi has said the central bank would consider buying government bonds if dangerously low inflation persists. Inflation currently sits at 0.3%, well below the ECB's target of just below 2%.
"I remain in the ever shrinking camp that does not believe we will ever see quantitative easing from the ECB and if I’m wrong, it will be an absolute last resort once all other options are exhausted, which is not even almost the case," Craig Erlam, analyst at Alpari UK, said.
“There is just too much opposition in Germany to QE and policy makers are too split on the political debate on whether it constitutes government funding. In my view, we would have to see negative inflation readings and dangerously low inflation in Germany before it becomes a realistic possibility."