Forex
ECB Moves Toward Stimulus Exit; Keeps Rate Unchanged
- ECB Moves Toward Stimulus Exit; Keeps Rate Unchanged
The European Central Bank (ECB) on Thursday in Tallinn said borrowing costs will remain at current level, zero percent, for an extended period.
However, the institution reaffirmed its readiness to increase the size or extend its bond-buying program if the economy worsen.
The better than expected economic data and easing political risk has helped the Euro-area attract foreign investors to its capital market and restored business confidence.
Also, the surge in economic activity in the region continued to aid the Euro single currency against the U.S. dollar, gaining 7 percent this year so far.
According to Mario Draghi, the President of the ECB, while, the outlook for GDP growth has been revised upward, downside risk continued to exist.
Accordingly, the ECB cuts 2017-2019 inflation forecasts, sees 2019 at 1.6 percent. Likewise, the ECB see rates at present level well past the end of QE. “The risks to broad growth are now balanced,” the apex bank said.