ECB kept interest rate unchanged

The European Central Bank (ECB) made no changes to its record-low interest rates and announced no new measures on Thursday in what was its first policy decision of 2017. Specifically, the ECB left its benchmark interest rate unchanged at a record-low 0.0%, in line with forecasts.

The central bank also held its deposit facility rate steady at -0.4% and its marginal lending rate remained at 0.25%.
Additionally, the Governing Council confirms that it will continue to make purchases under the asset purchase programme (APP) at the current monthly pace of €80 billion until the end of March 2017 and that, from April 2017, the net asset purchases are intended to continue at a monthly pace of €60 billion until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. 

The ECB's announcement reiterated its commitment to quantitative easing until it sees a "sustained adjustment in the path of inflation". Low interest rates will remain "at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases", the bank said.

The ECB head is likely to stress that there's no convincing sign yet of an upturn in inflation, and that the recent uptick is caused by higher oil prices and not by a fundamental improvement in demand for goods in the economy.

The ECB is sticking with stimulus, in contrast to the U.S. Federal Reserve. The Fed has raised interest rates twice and Fed Chair Janet Yellen said Wednesday that the U.S. central bank might hike rates "a few times a year" until 2019.