-ECB will monitor economic slowdown
As expected, the ECB kept policy rates and all forward guidance entirely unchanged at Thursday’s meeting in Frankfurt.
The Governing Council of the ECB decided that the interest rate on the main refinancing operations, the interest rate on the marginal lending facility, and the deposit facility would remain unchanged at 0.00 percent, 0.25 percent and minus 0.40 percent, respectively.
The Governing Council expects that key ECB interest rates will remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.
Regarding non-standard monetary policy measures, the Governing Council confirmed that the net asset purchases, at the current monthly pace of €30 billion, are intended to run until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.
The Governing Council remains confident about the outlook for growth and inflation, but considers that the soft patch recorded in the first quarter warrants monitoring.
The introductory statement and the Questions & Answers (Q&A) section reflected the ECB’s thinking on the recent slowdown in growth.
As markets expected, there were no policy announcements at the April ECB meeting or changes to forward guidance. The focus was on the recent moderation of economic activity.
Consequently, no discussions were made about the future course of monetary policy and many experts believe that this supports the view that the exit from exceptional policies will be slow and gradual.