ECB Leaves Rates Unchanged, First Strategic Review of Policy Since 2003

ECB left rates unchanged as expected in December in the second month of controversial Christine Lagarde at the helm. The bank left deposit facility interest rates at .-50% and held steady rates on the main refinancing operations and on the marginal lending facility unchanged. 

ECB left rates unchanged as expected after last month cutting deposit facility interest rates 10 bps to .50% and holding steady rates on the main refinancing operations and on the marginal lending facility unchanged. Sees rates at present or lower levels until near inflation goal


The European Central Bank announces its monetary policy decision for January 2020

The Governing Council of the European Central Bank decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases

  • Main refinancing rate 0.00% UNCH
  • Marginal lending facility 0.25% UNCH
  • Deposit facility -0.50% UNCH
  • Rate tiering system UNCH
  • Rates to remain at present or lower levels until inflation outlook robustly converges to target, reflected in underlying inflation
  • Announces first strategic review of policy since 2003
  • Further details on scope, timetable of review will be due later at 1430 GMT
  • Bond buying to continue until shortly before rates are raised

NB LTRO (Targeted Longer-Term Refinancing Operations) is best described as a long term loan to banks to increase loan creation. The banks lend above a specified benchmark and borrow from the ECB at a negative rate. This will provide an incentive for the banks to lend and thus increase private spending in the economy. That’s the theory clearly has not been a great success so far.

Full statement by the ECB:

Changes via RANsquawk @RANsquawk



The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today.”

The statement of President Lagrade ahead

ECB President Christine Lagarde and Vice-President Luis de Guindos explain the Governing Council’s monetary policy decisions and answer questions from journalists at today’s press conference.

Webcast – 14:30 CET

Alternate player (audio: en,fr,de) Watch on Twitter @ECB


Source: Euopean Central Bank

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