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ECB leaves interest rate unchanged ECB set to 're-examine' stimulus policy at next meeting
(35 minutes later)
The European Central Bank (ECB) has left its key interest rate unchanged at 0.05%, holding it at a record low. The European Central Bank (ECB) says it will "re-examine" its €1.1 trillion quantitative easing (QE) stimulus programme at its December meeting.
The central bank is later expected to underline its readiness to step up its €1.1 trillion stimulus programme. It has embarked on a scheme of bond purchases at €60bn per month designed to bring eurozone inflation back up.
The decision to leave the cost of borrowing unchanged was widely expected after the ECB cut rates to rock-bottom levels over a year ago. But consumer prices fell by 0.1% in the euro area in September, prompting speculation there may be changes to the bank's QE policy.
The comments came as the bank left its key interest rate unchanged at 0.05%.
'Monetary policy accommodation'
"The asset-purchase plans are proceeding smoothly and continue to have a favourable impact," Mr Drahgi said told a news conference in Malta.
"The degree of monetary policy accommodation will need to be re-examined at our December meeting."
The decision to leave the cost of borrowing unchanged was widely expected after the ECB cut rates to rock-bottom levels more than a year ago.
It kept the rate on bank overnight deposits at -0.2%, which means banks pay to keep funds at the central bank.It kept the rate on bank overnight deposits at -0.2%, which means banks pay to keep funds at the central bank.
The ECB also held its marginal lending facility - or emergency overnight borrowing rate for banks - at 0.3%.The ECB also held its marginal lending facility - or emergency overnight borrowing rate for banks - at 0.3%.
ECB President Mario Draghi is due to explain the decision hold rates steady at a news conference. Mr Draghi also said that the eurozone inflation rate was set to remain very low in the near-term.
Mr Draghi is expected to leave the door open for concrete policy action on quantitative easing (QE) later this year. After his comments, European bond yields and the euro fell.
Markets have begun to speculate that the ECB could increase its QE programme, given that consumer prices declined by 0.1% in the euro area in September. German 10-year bond yields fell 5 basis points to 0.53%, and euro fell to a three-week low of $1.1226 against the US dollar, down 1% on the day.
In March, the ECB embarked on a scheme of sovereign bond purchases at €60bn per month designed to bring eurozone inflation back up.