ECB keeps key interest rates unchanged, to proceed with QE

The European Central Bank (ECB) on Thursday decided to keep key interest rates unchanged.

The Eurozone base interest rate, namely the interest rate on main refinancing operations, will remain at 0.00 percent, with the marginal lending rate and deposit rate remaining at 0.25 percent and minus 0.40 percent respectively.

ECB President Mario Draghi told a press conference that ECB continues to expect the key interests to remain at present or lower levels for an extended period of time.

Though the euro area has seen inflation rate of 2 percent in February, "a very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium term," Draghi said.

Besides, ECB reaffirmed to follow the course determined by the Governing Council Meeting last December, namely to proceed with asset purchase programme (QE) at the current monthly pace of 80 billion euros (84.7 billion U.S. dollars) until the end of this month and of 60 billion euros from April onward, until the end of December 2017 or beyond if necessary.

ECB was ready to expand QE in terms of its size and duration, if the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation.

According to the latest ECB staff macroeconomic projections, Draghi said, ECB revised GDP growth forecast for the euro area upwards slightly to 1.8 percent in 2017 and 1.7 percent in 2018, followed by 1.6 percent in 2019.

Also significantly upwards has ECB revised its forecast of inflation rates for the euro area, namely 1.7 percent in 2017 and 1.6 percent in 2018. The outlook of inflation rates for 2019 remains unchanged at 1.7 percent. (1 euro = 1.06 U.S. dollars)