<!-- Swiftype Variables -->

ECONOMY

ECB stands pat on rates; Mario Draghi doesn’t see anything ‘substantial’ with inflation

European Central Bank President Mario Draghi

The European Central Bank announced Thursday that interest rates on the main refinancing operations of the eurosystem, which provides the bulk of liquidity to the banking system, will remain at zero.

The marginal lending facility, which provides overnight credit to banks from the eurosystem, stays at 0.25%. Interest rates on the deposit facility, which is used by banks to make overnight deposits, will remain at -0.4%.

The governing council confirmed in a news release that the net asset purchases at the current monthly pace of €60 billion ($67 billion) are intended to run until the end of December 2017. Europe's central bank added in the release that these purchases could be extended “beyond December if necessary.”

Mario Draghi, president of the European Central Bank, said at a press conference, taking place after governing council meeting in Tallinn, Estonia, that the subdued nominal wage growth was responsible for slower inflation. “The inflation is currently driven solely by oil and food price at 1.4%, down from 1.9% in April,” he said. “Nothing substantial has yet happened with inflation,” he said

Mr. Draghi added that the normalization of the monetary policy or “tapering” was not discussed at the meeting Thursday. The ECB's top official reiterated that the central bank will continue the asset purchases until the 2% inflation objective is met.