The European Central Bank (ECB) kept its rates unchanged on Thursday following new President Christine Lagarde's first monetary policy meeting in Frankfurt.
The Governing Council voted to keep the main deposit rate at the historic low of -0.5%, in line with market expectations, while the marginal lending facility remained at 0.25%.
The ECB's statement reiterated that rates will stay at the current level or lower until the central bank has seen the inflation outlook "robustly converge" to that level on a consistent basis.
It also confirmed that net asset purchases had started at a monthly rate of 20 billion euros ($22.3 billion) and that this will continue to run "as long as necessary" to reinforce the accommodative policy stance.
Market reaction was somewhat muted, with the euro trading roughly flat against the dollar at $1.1132 following the announcement and equity markets turning slightly negative after marginal early gains.
In September, Lagarde's predecessor Mario Draghi launched a massive stimulus package which entailed a cut to the central bank's main deposit rate a second round of quantitative easing in a bid to stimulate the sluggish euro zone economy.
The move proved controversial among the Council, but Lagarde offered support to the bond-buying program and record low rates back in September, highlighting that the challenges warranting a highly accommodative policy stance had not diminished.
While Lagarde was not expected to break from the trajectory set in motion by Draghi so early in her tenure, investors will be closely monitoring the semantics in her impending press conference for any hints on future policy direction.
Lagarde, the former head of the International Monetary Fund (IMF) and former French finance minister, inherited an inflation rate of 1.0% against an ECB target of "below but close to 2%" upon taking the reins in November.
One of her first moves was to announce a wide-ranging policy review, the first since 2003, with the euro zone central bank's current stance under fire from market participants.
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December 12, 2019 at 07:45PM
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ECB holds rates steady at Lagarde's debut policy meeting - CNBC
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