ECB monetary policy meeting maintains current EUR interest rates

Difficulties in Greece and recent market volatility did little to hinder economic volatility, leading to the unanimous decision.

Since the Governing Council’s monetary policy meeting on 2-3 June 2015, financial markets had again been characterised by volatility, in part driven by uncertainty related to developments in Greece. The Eurosystem nevertheless continued to smoothly execute the expanded asset purchase programme (APP), in line with the announced moderate frontloading of purchases.

In the euro area money market, the decline in interest rates had been limited, despite the large increase in excess liquidity. The EONIA had averaged -11.8 basis points since the beginning of the current maintenance period, compared with -9.8 basis points in the previous period. Overall, short-term money market rates had remained broadly stable, unaffected by the re-pricing in bond markets and by the uncertainty related to Greece.

Summing up, the French Council member, Mr Praet noted that the data that had become available since the Governing Council’s previous monetary policy meeting in early June had broadly confirmed expectations. Real GDP growth in the euro area was proceeding in line with a broad-based moderate recovery, while downside risks prevailed. The outlook for price developments over the medium term was also by and large unchanged.

Overall, taking into account the views expressed, the President concluded that the Governing Council was unanimous in its assessment that a steady monetary policy course should be maintained.

Source: ECB