ECB holds interest rates steady and announces tapering plans

Investing.com – The European Central Bank announced Thursday that it would extend its tapering program longer although at a lower amount of purchases, while keeping interest rates unchanged.

Specifically, and beginning in January, the ECB will reduce monthly purchases from the current €60 billion ($70.6 billion) to €30 billion ($35.3 billion) and will extend those purchases to “the end of September 2018, or beyond, if necessary”.

Furthermore and as expected, the ECB left its unchanged at a record-low 0.0%.

The central bank also held its steady at -0.4% and its marginal lending rate remained at 0.25% as expected.

“The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases,” the statement repeated.

Traders now look ahead to ECB president Mario Draghi’s at 8:30AM ET (14:30GMT).

After the announcement and ahead of Draghi, the euro declined sharply breaking below the $1.18 psychological level. was trading at 1.1763 from around 1.1807 ahead of the release, while was at 0.8907 from 0.8978 earlier.

Meanwhile, European stock markets extended earlier gains. The benchmark rose 0.75%, France's gained 0.82%, Germany's advanced 0.57%, while London’s traded up 0.51%.