ECB lowers rate on deposit facility by 10 basis points to -0.50% as expected
|- ECB lowers deposit rate by 10 basis points as expected% as expected.
- ECB says interest rates to remain at their present or lower levels.
- Volatility surrounding the shared currency rises as attention turns to Draghi.
At its monetary policy meeting held today, the Governing Council of the European Central Bank (ECB) decided to leave the interest rates on the main refinancing operations and the interest rates on the marginal lending facility unchanged at 0.00% and 0.25%, respectively, and lowered the rate on deposit facility by 10 basis points to -0.50%. Attention now turns to ECB President Mario Draghi's press conference at 12:30 GMT.
With the initial market reaction, the EUR/USD pair erased its daily gains and was last flat on the day near 1.1010. Below are some key takeaways, via Reuters, from the ECB's policy statement.
"ECB now expects interest rates to remain at their present or lower levels until it has seen inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics."
"Net purchases will be restarted under ECB's APP at a monthly pace of €20 billion as from 1 November."
"Reinvestments of principal payments from maturing securities purchased under app will continue, in full, for an extended period of time past date when ecb starts raising interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation."
"ECB expects them to run for as long as necessary to reinforce accommodative impact of its policy rates, and to end shortly before it starts raising interest rates."
"Modalities of new series of quarterly TLTRO (TLTRO III) will be changed to preserve favourable bank lending conditions, ensure smooth transmission of monetary policy and further support accommodative stance of monetary policy."
"Interest rate in each operation will now be set at level of average rate applied in Eurosystem's main refinancing operations over life of respective TLTRO."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.