TALLINN: The European Central Bank left its aggressive stimulus policy unchanged on Thursday, but closed the door to further rate cuts, as inflation remained below its target despite accelerating economic growth.
The ECB is on course to buy 2.3 trillion euros ($2.59 trillion) worth of bonds and is charging banks to hold their excess cash via a negative interest rate in a bid to bring price growth in the euro zone to its target of just under 2 percent.
Even if price growth has stabilised above 1 percent, the ECB has been reluctant to tighten its policy, wary that the recent bounce was mainly due to energy prices while wage growth has remained sluggish.
On Thursday, the ECB repeated its standard guidance that it expects its key interest rate to remain at their present level for an extended period of time and well past the horizon of its asset purchases.
It also affirmed that its asset buys, which have been cut by a quarter to 60 billion euros a month from April, could be increased or extended if the outlook for the euro zone becomes less favourable.
The ECB kept its rate on bank overnight deposits, which is currently its primary interest rate tool, at -0.40 percent.
The main refinancing rate, which determines the cost of credit in the economy, was unchanged at 0.00 percent while the rate on the marginal lending facility -- or emergency overnight borrowing rate for banks -- remains at 0.25 percent.
Markets now turn their attention to Draghi's news conference at 1230 GMT, in which he will explain the ECB's decision to keep its policy stance unchanged.
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