The European Central Bank (ECB) kept its key interest rates unchanged in today’s Governing Council meeting. According to President Mario Draghi, the central bank is determined to keep the rates at least at the present or even lower level until the first half of 2020.
The tone of voice about the slow economic growth and the needed stimulus package has become more serious. The bank is now also considering the asset purchase program (APP) again.
-This outlook is getting worse and worse, and it is getting worse and worse in manufacturing and getting worse and worse in countries where manufacturing is very important, Mr Draghi said in the press conference.
He reminded about the geopolitical situation, trade tensions, lower manufacturing figures, hard Brexit and the low growth rate of Chinese economy as the main reasons for the low economic outlook. And he also said many times: We do not like what we see (referring to the low inflation figures).
The central bank said already in the previous press conference that it has helped banks to boost the financing and liquidity of corporate lending as part of the financial stimulus.
-Teltra 3 will help bank lending and access to finance especially for small and medium size companies in the euro-zone, Draghi reminded.
The financial markets are expecting that the ECB would lower its rates in September meeting, while the Federal Reserve is expected to do it already next week.