European Central Bank policymakers have kept interest rates and their bond buying programme unchanged, setting the stage for more easing in December.
ADVERTISEMENTThere were no new stimulus measures announced by the European Central Bank on Thursday.
At their latest meeting ECB policymakers kept interest rates unchanged and deep in negative territory.
ECB President Mario Draghi and his colleagues also said the bond buying programme to pump money into the eurozone economy will continue at the same level – 80 billion euros per month – through to next March.
Monetary policy decisions: rates unchanged https://t.co/5cbHUDXmbM
— ECB (@ecb) October 20, 2016
Draghi said the eurozone economy is continuing to post a “moderate recovery” and inflation will continue to rise in the next couple of months. He hinted at new stimulus measures in December, saying: “We will continue to act, if warranted, by using all the instruments at our disposal.”
Draghi: In Dec the GovC will benefit from work of Eurosystem committees, to ensure smooth implementation of APP until March 2017 or beyond
— ECB (@ecb) October 20, 2016
Based on Draghi’s comments, the financial world is betting that December will see some additional stimulus measures.
For the moment it is a wait and see approach given that the eurozone economy is chugging along, inflation for the region is still low but at its highest in two years, and various governments are moving ahead with budgets which will include some more spending.
There was no significant reaction to the ECB’s announcements from the financial markets. The euro slipped against the US dollar after Draghi said the Governing Council had not discussed ending or extending its bond buying programme during the September meeting.
