Eurozone Monetary Policy April 2017


Eurozone: ECB holds monetary policy

April 27, 2017

The European Central Bank (ECB) decided to hold interest rates, as widely expected, at its 27 April meeting and made no changes to its bond-buying program. The refinancing rate, the marginal lending rate and the deposit facility rate remain at 0.00%, 0.25% and minus 0.40%, respectively.

The ECB’s monetary policy stance remains ultra-accommodative despite a recent rise in price pressures in the common-currency bloc and clear firming of economic activity. Although inflation receded in March, price pressures are notably above last year’s levels largely due to higher global energy prices, while economic data is overwhelmingly positive. Although incoming data has led market analysts to speculate that the ECB could taper its bond-buying program soon, the Bank held its forward guidance largely unchanged from last month. President Mario Draghi reiterated that interest rates would remain at low levels for an extended period of time and confirmed the Bank’s commitment to buy EUR 60 billion of assets a month.

There is a strong consensus on the path of interest rates going forward and all of the analysts surveyed by FocusEconomics expect the ECB to keep the policy rate unchanged at the current record-low of 0.00% this year. For next year, our panelists see the policy rate ending the year at 0.04%.

Author: Angela Bouzanis, Senior Economist

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Eurozone Monetary Policy Chart

Euro Monetary Policy April 2017 0

Note: ECB Refinancing Rate in %.
Source: European Central Bank (ECB).

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