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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

BankofECB

The European Central Bank announces its monetary policy decision for October 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 -0.50% 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
  • Sees rates at present or lower levels until near inflation goal
  • To continue with bond purchases for as long as needed
  • To stop bond purchases shortly before raising rates
  • To reinvest QE debt for extended period of time after first rate hike
  • Confirms to begin bond purchases of €20 billion per month starting from 1 November

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

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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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