ECB is keeping a wary eye on developments

Last week’s ECB monetary policy meeting saw no changes being made, despite some expectations in the market of a rate cut or some new liquidity measures.

Nonetheless, the ECB emphasised that it is firmly committed to maintaining an accommodative monetary policy stance for as long as is necessary.

The ECB retains a clear easing bias, given its forward guidance that rates will remain at present or lower levels for an extended period of time. ECB president Mario Draghi indicated that the governing council needs more information in regard to the problems in emerging markets, credit flows, the real economy and inflation, before making any decision to ease policy further.