- Mario Draghi, ECB President
European Central Bank made a decision to hold all interest rates in the Euro zone unchanged at its meeting in Frankfurt on Thursday. Separately, the deposit rate remained at historical low of –30 basis points, while marginal lending facility and main refinance rate are also flat at 0.30% and 0.05%, respectively. No change followed a wide range of supportive decisions undertaken in December when the ECB lowered deposit rate to –0.3% from –0.2% and announced it is going to extend the QE programme through March 2017. At the same time, during the press conference President Mario Draghi announced that the regulator stands ready to act again as soon as early March when the Governing Council is going to have next monetary policy meeting. Such comments came out as a surprise for the markets, with the Euro dipping down around 100 pips versus US Dollar in a few minutes after Draghi's words. President expects the very accommodative monetary policy to remain in place for a long period of time, being that growth and inflation expectations are highly likely to be downgraded one more time in March when new ECB staff projections will become available.
By acknowledging that bond-buying programme is successfully continuing, Mario Draghi added that he is ready to respond to equity and commodity market turmoil of the first two weeks of 2016. On the positive side, internal demand in the Euro area should mildly recover in the wake of decisions the ECB took last year.
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