The European Central Bank opted to hold interest rates, in line with market forecasts, but it set a strong guidance on the future monetary policy path.
The ECB left the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility at 0.00%, 0.25% and -0.40% respectively.
“The Governing Council expects the key ECB interest rates to remain at their present or lower levels at least through the first half of 2020,” while policy will remain “highly accommodative” for “a prolonged period of time,” the ECB said in its statement.
The ECB said it would remain “ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner.”
There could be more quantitative easing measures coming in the next period, as the Governing Council said the relevant Eurosystem Committees will examine options such as “the design of a tiered system for reserve remuneration, and options for the size and composition of potential new net asset purchases.”
As of 12:05 GMT, the euro plunged to a new
two-month low at $1.1111, extending its drop for a fifth straight session.