The European Central Bank (ECB) President Mario Draghi attends a press conference at the ECB headquarters in Frankfurt, Germany, on July 26, 2018. The ECB Thursday decided to maintain the key interest rates for the euro area, expecting them to remain at their present levels at least through the summer of 2019. (Xinhua/Luo Huanhuan)
FRANKFURT, July 26 (Xinhua) -- The European Central Bank (ECB) Thursday decided to maintain the key interest rates for the euro area, expecting them to remain at their present levels at least through the summer of 2019.
The Eurozone base interest rate will remain at 0.00 percent, with the marginal lending rate and deposit rate remaining at 0.25 percent and minus 0.40 percent respectively.
"Our enhanced forward guidance has been very effective, we see no need to modify our language," ECB President Mario Draghi said at a press conference in Frankfurt, Germany.
In addition, the ECB reaffirmed that the monthly net asset purchases will be cut to 15 billion euros (17.6 billion U.S. dollars) from October until the end of December 2018 and that net purchases will then end.
Even after a gradual winding-down of our net asset purchases, the underlying strength of the Eurozone economy confirms the confidence of ECB that the sustained convergence of inflation to its aim will continue, told Draghi.
"Nevertheless, significant monetary policy stimulus is still needed...", he confirmed.
In order to maintain favorable liquidity conditions and an ample degree of monetary easing for the euro area, the ECB intends to reinvest the principal payments from maturing securities purchased for an extended period of time after the end of our net asset purchases, however, the details of reinvestment remains unclear to financial markets.
"Just to be clear on reinvestment, we haven't discussed it but the capital key remains our anchor," so clarified Draghi.
Against the backdrop of the inflation rate of the euro area which has increased to 2 percent in June, the ECB expects the inflation rate is likely to hover around the current level for the remainder of the year.
"While measures of underlying inflation remain generally muted, they have been increasing from earlier lows," Draghi said, underlying that uncertainty around the inflation outlook is receding.
"Patience, prudence and persistence are still the key words informing and inspiring our monetary policy," he summarized.
