Three central banks kept interest rates unchanged at the latest meetings of their monetary policy committees.
The European Central Bank said Thursday its governing council kept the interest rate on the main refinancing operations of the eurosystem, which provides the bulk of liquidity to the banking system, at zero. Overnight credit for banks, known as the marginal lending facility, was kept at 0.25%, while the interest rate on the deposit facility, which banks in the region may use to make overnight deposits, was held at -0.4%.
Mario Draghi, president of the ECB, speaking at a news conference reconfirmed that the central bank's asset purchases will fall to €30 billion ($35.3 billion) per month from €60 billion, starting in January. This will continue to the end of September 2018 or beyond if necessary.
Regarding the U.S. Federal Reserve's decision to raise rates by 25 basis points to a target range of 1.25% to 1.5%, Mr. Draghi said: "The difference in monetary policy decisions and therefore in the interest rates decisions that were taken on the other side of the ocean reflects the different positions of the two areas in the economic recovery."
He pointed out that while the recovery in Europe is stronger, "the stage in the U.S. is more advanced," especially when considering nominal wages.
Responding to questions as to whether the differing policies have been detrimental to Europe, Mr. Draghi added: "We haven't seen any effect from this," and said the present state of rates "by and large reflects the differences in the stage at which the two economies are."
Also Thursday, the Bank of England said its monetary policy committee, which sets policy to meet a 2% inflation target, voted unanimously Wednesday to maintain interest rates at 0.5%.
Further, Norway's central bank, Norges Bank, decided to keep interest rates unchanged at 0.5% also. "There is a continued need for an expansionary monetary policy. Interest rates abroad are low. There is still some spare capacity in the Norwegian economy. The outlook suggests that inflation will remain below 2.5% in the coming years," said a statement on the bank's website.
Abbie Parrott contributed to this story.
