"The Governing Council expects the key ECB interest rates to remain at present or lower levels for an extended period of time"
- ECB President Mario Draghi
The European Central Bank's President Mario Draghi expects to keep monetary policy on hold for an extended period of time, as he is trying to restrain market borrowing costs and boost growth in the 17-nation economy. During his monthly policy meeting Draghi left main refinancing rate unchanged at 0.5%, meeting analysts' expectations, and fleshing out the ECB's outlook for the monetary policy, as investors pushed long-term bond yields higher, posing certain risks for the economy.
The decision follows a political crisis in Portugal, as two key ministers stepped out. Earlier this week, Portuguese Finance Minister Vito Gaspar, who was responsible for implementation of the unpopular austerity measures for the past two years, handed in his resignation. At the same time, the nation's Foreign Minister and junior coalition leader Paulo Portas, followed his example. Soon after the announcement of resignation, bond yields in the country soared above 8%. Draghi also assured that rates would stay at the record low as long as inflation and the economy in general remains weak, however, added, that in case of further deterioration, additional stimulus may be needed.
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