The European Central Bank left interest rates and the region’s asset purchase program unchanged at the first meeting of its governing council following the U.K. decision to leave the European Union, choosing instead to wait for further economic data before reassessing the situation.
Presenting the decisions of the latest meeting of the ECB governing council, ECB President Mario Draghi said the interest rate on the main refinancing operations will remain at zero, while rates on the marginal lending facility and the deposit facility will stay at 0.25% and -0.4%, respectively. He also reiterated that the €80 billion ($88.4 billion) per month asset purchase program would run through March 2017, or beyond if necessary.
Mr. Draghi said: “Following the U.K. referendum on EU membership, our assessment is that euro-area financial markets have weathered the spike in uncertainty and volatility with encouraging resilience.” He repeated that central banks are ready, willing and able to expand policy measures if needed.
At a news conference following the announcement, Mr. Draghi addressed questions regarding the ECB’s policies following the Brexit decision. “We decided that over the coming months, when we have more information, including new staff projections, we’ll be in a better position to reassess the underlying macroeconomic conditions,” he said.
The meeting comes ahead of the Group of 20 finance ministers and central bank governors meeting in China on July 23. “It is very important that a message of stability comes out of the G-20,” Mr. Draghi said. “And the message that will come out specifically from the eurozone would be a message of a recovery that continues. Though it is at lower pace, in the midst of great uncertainties — uncertainties that are not especially coming from the eurozone, but they come from various parts of the world.”
He said uncertainty is not necessarily economic, “but probably mostly geopolitical uncertainty.” Monetary policies are “very accommodative, the financial system and the banking system are stronger than they were before,” and that is an important message, he added.
Jack Lejk contributed to this story.
