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(Kitco News) – The European Central Bank left its rates unchanged on Thursday and extended the period during which officials expect them to remain at current levels.
The interest rate on the main refinancing operations and the rates of the marginal lending facility and the deposit facility will remain at 0.00%, 0.25% and 0.40% respectively.
"The Governing Council now expects the key rates of the ECB to remain at least at their current level during the first half of 2020, and in any case as long as necessary to ensure the continued sustained convergence of inflation towards lower levels, but close to, at 2% in the medium term ", declared the ECB.
At their last meeting, board members had said they would expect rates to remain at their current lowest levels for a shorter period – at least until the end of 2019.
As the global trade war intensified, the central bank should remain calm to revive the European economy. Italy is also in conflict with the European Commission over debt problems and insufficient data from German industry. According to Reuters, the ECB should offer to pay the banks if they borrow cash from the central bank and pass it on to households and businesses.
Officials reiterated that the Board of Governors intends to continue reinvesting principal repayments of maturing securities under the asset purchase program for an extended period following the date on which it was issued. began raising interest rates in order to maintain favorable liquidity conditions and broad monetary facilities.
"Regarding the terms of the new series of longer-term refinancing operations targeted quarterly (TLTRO III), the Governing Council decided that the interest rate of each transaction would be set at a higher point of 10 basis points at the average rate applied in the Eurosystem's main refinancing operations over the life of their respective TLTROs, "said the ECB:" For banks whose eligible net lending exceeds a benchmark, the rate applied in TLTRO III will be lower and may be as low as the average interest rate of the deposit facility prevailing over the duration of the transaction, plus 10 basis points.
ECB President Mario Draghi will hold a press conference at 2.30 pm Paris time or 8.30 am EDT.
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