ECB: Still Seeking to Reassure

Posted February 7, 2013 by rvillareal

• Surprising almost no-one, the ECB Council kept all its rates on hold after its February council meeting, thereby keeping in place the record-lows  for the refi rate (at 0.75%) and the deposit rate (at zero) first put in place last July. [private]
• Equally unsurprising, the tone of the (still somewhat succinct) accompanying statement was very much a repetition of what was said in the last two months.
• President Draghi was not willing to show much concern about the stronger currency seen of late, suggesting the higher euro reflects improved confidence.
• Indeed, a stronger euro may only reinforce the already evolving fall in HICP inflation: DE sees a move towards 1% in the next six months or so.  
• DE View: Nevertheless, President Draghi implied that it would be very premature to consider any exit plan, instead actually stressing that policy is accommodative and reiterating that liquidity will be made fully available. The ECB is likely to remain on hold for some time.

ECB Feb 7[/private]