The ECB held its main refinancing rate at 0.15 per cent and its deposit rate at -0.10 per cent, effectively charging banks for holding their money overnight as it tries to encourage them to lend to small- and medium-sized businesses.
The central bank is waiting to assess the impact of the measures presented last month – cuts in its rates to record lows, and a series of steps to pump money into the economy – which it says could take up to a year to take full effect.
“This is as expected,” Berenberg bank economist Christian Schulz said of the rate decision.
“After the rate cut in June, they’ll wait a couple of months, probably until the end of the year, to assess the effect that will have.”
The measures unveiled last month included extending the duration of unlimited cheap liquidity for banks until the end of 2016, and offering them a TLTRO four-year loan plan to borrow at a slight premium to regular ECB funding operations.
The ECB’s decision last month to charge banks for parking their excess money at the central bank overnight has not yet reanimated money markets, but it is helping to keep short-term rates low and steady.