The European Central Bank (ECB) pushed its deposit rate further into negative territory and extended its quantitative easing by at least another six months to counter "heightened uncertainties" in the global economy that could weigh on euro area exports and confidence.
The ECB, which left its benchmark refinancing rate steady at a record low of 0.05 percent, cut the deposit rate by 10 basis points to minus 0.30 percent and extended its asset purchase program until the end of March 2017 or even beyond if necessary to ensure that inflation heads toward the central banks target of inflation that is below, but close to 2.0 percent.
In addition, the ECB also said it would reinvest the payments it receives on bonds purchased, broaden the type of assets purchased to include regional and local government bonds in addition to sovereign bonds, and continue to conduct longer-term refinancing operations for banks as a fixed rate tender with full allotment for as long as necessary, or at least until end-2017.
ECB President Mario Draghi underscored that the latest round of easing was aimed at ensuring that inflation returns to target and helps anchors inflation expectations as the persistence of low inflation reflects the "sizable" economic slack that is weighing on prices along with external headwinds.
In its latest forecast, ECB staff maintained its 2015 inflation forecast at 0.1 percent and trimmed the 2016 forecast to 1.0 percent from the September forecast of 1.1 percent and the 2017 forecast to 1.6 percent from 1.7 percent.
The forecast for growth this year was raised slightly to 1.5 percent from 1.4 percent projected in September, reflecting stronger domestic demand while foreign demand is weaker.
For the 2016 the forecast was unchanged at 1.7 percent while the 2017 forecast was raised to 1.9 percent from 1.8 percent.
The European Central Bank issued the following introductory statement to its press conference by President Mario Draghi"