ECB rate retention seen buoying Asian markets

The European Central Bank’s (ECB) decision to maintain interest rates will buoy the region’s economy, which in turn will benefit the Philippines, a Bangko Sentral ng Pilipinas (BSP) official said.

During the ECB’s policy meeting, its Governing Council decided to keep interest rate on the main refinancing operations at zero percent, interest rate on marginal lending facility at 0.25 percent and the deposit facility at negative 0.40 percent.

“`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,” it said in a statement issued after the meeting.

It added that ECB’s 80 billion euro monthly asset purchases “are intended to run until the end of March 2017, or beyond, if necessary, and in any case until it sees a sustained adjustment in the path of inflation consistent with its inflation aim.”

BSP Deputy Governor Diwa Guinigundo said ECB’s latest policy decision “is consistent with modest output performance in Europe.”

“I think it is the proper thing to do for Europe to sustain their policy for providing stimulus for their economy,” he told reporters in an interview.

The BSP official said any positive growth results in Europe will be beneficial to the Philippines since it will translate to higher investments to the country.