- Prior decision
- Deposit facility rate 2.75% vs 2.75% expected
- Prior 3.00%
- Main refinancing rate 2.90% vs 2.90% expected
- Prior 3.15%
- Marginal lending facility 3.15%
- Prior 3.40%
- The disinflation process is well on track
- Inflation has continued to develop broadly in line with staff projections
- Inflation is set to return to 2% target in the course of this year
- Recent rate cuts are gradually making new borrowing less expensive for firms and households
- The economy is still facing headwinds
- But rising real incomes, fading effects of restrictive policy should support a pick-up in demand over time
- To follow a data-dependent, meeting-by-meeting approach in determining appropriate policy stance
- ECB is still not pre-committing to a particular rate path
- Full statement
The decision and statement are in line with market expectations as it is all pretty much a repeat of the December decision. With markets also anticipating another rate cut in March, the language fits with that as the ECB reaffirms that they are still on a data- dependent approach.
The euro is barely moved from the decision with EUR/USD seen at 1.0408 currently, down 0.1% on the day.
It’s on to Lagarde’s press conference next. And if she plays her cards right, there won’t be too much to scrutinise from all of this today.
This article was written by Justin Low at www.forexlive.com. Source