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ECB interest rates on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged. Surprises by changing forward guidance on interest rate new TLTROs.

BankofECB

The European Central Bank announces its monetary policy decision for March 2019

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 -0.40% 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%
  • Marginal lending facility 0.25%
  • Deposit facility -0.40%
  • To keep rates unchanged at least through the summer of 2019
  • ECB changes forward guidance on interest rate
  • ECB announces new TLTROs - Will start a series of two-year TLTROs in September
  • Precise terms of TLTROs to be communicated in due course

TLTRO (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 Draghi ahead

ECB President Mario Draghi and Vice-President Vítor Constâncio 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

Live. https://www.ecb.europa.eu/home/html/index.en.html

Source: Euopean Central Bank

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