The ECB announces its latest monetary policy decision - 12 December 2019

  • Prior decision
  • Deposit rate facility -0.50%
  • Main refinancing rate 0.00%
  • Marginal lending facility 0.25%
  • Rates to remain at present or lower levels until inflation outlook robustly converges to a level sufficiently close to, but below 2%
  • Bond buying to continue until shortly before rates are raised
  • Expects QE to run for as long as necessary to reinforce accommodative impact of rates

The key item to watch was the language on inflation and that remains unchanged. As such, this is pretty much as non-event as you can get. The rest of the statement reads pretty much the same as the October policy statement.

Here's the full statement:

At today's meeting the Governing Council of the European Central Bank (ECB) 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 or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.

On 1 November net purchases were restarted under the Governing Council's asset purchase programme (APP) at a monthly pace of €20 billion. The Governing Council expects them to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.

The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today.

It's over to Christine Lagarde now with her press conference set to begin at 1330 GMT. The euro is unfazed by the decision here with EUR/USD sitting at 1.1132 currently.