FRANKFURT (Reuters) - The European Central Bank kept its policy unchanged as expected on Thursday, staying on track to end lavish bond buys by the close of the year and to keep rates record low at least through next summer.
With inflation rebounding, the ECB decided last month to end a 2.6 trillion euro bond purchase scheme by the end of December but also promised protracted stimulus for years to come as the euro zone is economy is still far from full health.
“The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2 percent over the medium term,” the ECB said in a policy statement.
The ECB has already spent around 2.5 trillion euros ($2.93 trillion) buying bonds since 2015 and has kept its deposit rate below zero, effectively charging banks for their idle cash, for four years in a bid to revive inflation.
Attention now turns to ECB President Mario Draghi’s 1230 GMT news conference, at which he is likely to discuss the economic soft patch and growing concerns that protectionism could morph into a trade war and hold back growth.
With Thursday’s decision, the ECB’s rate on bank overnight deposits, which is currently its primary interest rate tool, remains at -0.40 percent.
The main refinancing rate, which determines the cost of credit in the economy, remained unchanged at 0.00 percent while the rate on the marginal lending facility — the emergency overnight borrowing rate for banks — remains at 0.25 percent.
Reporting by Balazs Koranyi; Editing by Francesco Canepa