"The key ECB interest rates will remain at present levels for an extended period of time in view of the current outlook for inflation," Draghi said in
Earlier today, the ECB held the refinancing rate at a record low 0.15%, the deposit rate at -0.10% and the marginal lending rate at 0.40%.
In June, the bank slashed the deposit rate from zero to negative, which in effect would charge Eurozone banks for parking excess funds at the ECB, a first for a leading central bank. The refi rate and the lending rate were also reduced last month.
"We are strongly determined to safeguard the firm anchoring of inflation expectations over the medium to long term," Draghi said.
Eurozone inflation held steady at 0.5% in June, remaining below the ECB's aim of keeping the figure 'below, but close to 2%' for the seventeenth consecutive month.
In June, the ECB staff forecast inflation for this year at 0.7% and 1.1% for next year.
The central bank also announced the details of the targeted longer-term refinancing operations, or TLTROs, announced in June. The
Under the plan, financial institutions can borrow money from the ECB, totaling 7% of their total loans to households and the non-financial private sector.
Banks that borrow in the TLTROs and fail to achieve their benchmarks as of
The earlier cheap long term loan offerings from the ECB saw banks taking the money and failing to lend it to the real economy. The pay-back clause in the latest plan shows the central bank is keen to see that its efforts actually boost lending.
Draghi also reiterated the bank's interest in starting the Asset Backed Securities purchase programme.
"Draghi's remarks on the ABS programme, however, still leave some uncertainty on whether it will ever happen,"
"Normally, as soon as Draghi starts talking about coordinating ABS preparatory work with other international bodies, this is a clear sign that it won't happen soon."
The ECB sees the risks to the Eurozone economic outlook on the downside, while the risks to the inflation outlook were broadly-balanced, Draghi said.
"We will closely monitor the possible repercussions of geopolitical risks and exchange rate developments," he added.
Further, Draghi announced that the
The reserve maintenance periods will be extended to six weeks to match the new schedule, Draghi said. Banks are required on average to hold minimum reserves with the
The bank also plans to start publishing regular account of its monetary policy meetings from
Most Popular Stories
- Honda' s Accord Plug-in Hybrid Is a Fuel Miser
- Hernandez lawyer: Pats Records Dispute Resolved
- National Retail Federation Reduces Sales Forecast
- Social Media Startups That Pay You to Post
- Female Business Owners Still Face Gender Gap
- Amazon Fire Phone Improves on Familiar: Review
- Congress Leaving Town as Deadlines Loom
- Oregon Voters to Decide on Recreational Pot
- 4th Circuit Upholds Obamacare Subsidies
- Oregon to Vote on Recreational Marijuana