The recent volatility in the Euro “needs monitoring” but “by and large the risks to growth are balanced,” said European Central Bank president Mario Draghi at the press conference following the ECB’s rate decision.
The central bank confirmed key interest rates will remain unchanged at record lows, inline with market expectations. In addition, Draghi said they expect them to remain there “well past” the end of its quantitative easing programme.
Some market participants had been looking for a hint of a monetary policy change for 2018.
The bank announced they will keep buying 30 billion euros per month in bonds all through September, more “if the outlook becomes less favourable.”
No big changes were expected from the announcement, but there were big questions over how the ECB was going to tackle the rise of euro against dollar, a fact that is threatening to impact hard on inflation in the euro zone and could affect European exports.
The ECB has been fighting to bring up inflation to about 2 percent but it is not expected for them to meet the goal until 2020.
The euro topped $1.25 as Draghi was giving the press conference this afternoon surging to a new three-year high as doubts about the future of the ECB remain.
