The European Central Bank just left its deposit rate untouched at -0.30%, against a background of high volatility in financial markets right now.
The move was widely expected by the global markets, following the decision by the bank’s governing council to cut rates at its last meeting in December 2015.
While the hold doesn’t come as a surprise, markets in Europe and across the world will be waiting with bated breath to here what ECB president Mario Draghi says when he steps up to take questions from the press at 1:30 p.m. GMT (8:30 a.m. ET).
It’s thought that Draghi might address the threat of low inflation within the Eurozone at the press conference, as Europe’s markets are hit by the oil price slide, and China’s slowing growth.
The ECB predicted in December that inflation would average at 1% during 2016, but inflation within the Eurozone currently sits at just 0.2%, and some, including Barclays, predicting it will fall as low as 0.1% this year. The oil slump is a big driver in this.
Thursday’s rate decision went a lot more smoothly than at December’s deposit rate announcement when a false report from the Financial Times that the ECB had left rates untouched was accidentally published nine minutes ahead of time. It shocked markets, and sent the euro spiking.
Then, the ECB’s actual decision was to push its deposit rate even further into negative territory, cutting from -0.20% to -0.30%
At the same time as announcing the unchanged deposit rate, Europe’s central bank also left its refinancing rate untouched at 0.05%, once again meeting market expectations.