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The European Central Bank did not surprise. It keeps the fixed price of monetary policy.
As expected, the ECB left interest rates unchanged (refinancing at 0%, central bank lending at 0.25% and deposit rate at minus 0.40%). The ECB statement shows that they will remain ultra-low until at least the summer of 2019. It has also been confirmed that the QE program will be extinguished at the end of December 2018.
– We do not need to change our projections at this stage of interest rates – said Mario Draghi, President of the ECB at a press conference . He also revealed that the meeting of the Board of Governors on Thursday did not address the issue of reinvestment on market income generated by the ECB from maturing bonds accumulated under the program. quantitative easing. He clearly avoided deepening the subject. Read more: The strong euro has begun to lead the ECB
Draghi pointed out that risk factors for economic growth in the euro area are "largely balanced", and trade tensions are still there. one of the threats: in Draghi's answers, the conference lacked clear impulses and more "warmongers", so that the euro weakened against the dollar. In the afternoon, only $ 1,169 was paid for 1 euro. Since the beginning of the year, it has weakened by 2.5% against the dollar
In general, however, Thursday's conference of Draghi was considered extremely short and unclear. Much of the ECB President's message was a repetition of what happened at the previous conference. Carsten Brzeski, an economist at ING
has written on Twitter since the ECB announced last month that it would end the quantitative easing program in December and keep interest rates at the same level. at least until 2019, investors considered the July meeting of the ECB as irrelevant – admits Jennifer McKeown, an economist at the research company Capital Economics
The differences in the translation of the release of the ECB caused some confusion. whose interest rates will be kept at very low levels, these differences refer to the phrase "at least until the summer of 2019". In some language versions, it was the term "through the summer" or "until the end of the summer". Analysts' forecasts collected by the Bloomberg agency indicate that the first interest rate hikes in the eurozone are expected at the earliest in September or October 2019. Just before the end of Mario Draghi's term (which expires 31 October 2019). This means that when US interest rates reach 3.75% -4%, the main interest rate of the ECB will still be 0%, and the deposit rate will be negative. This space can overwhelm the successor of Draghi.
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