Investing.com - The European Central Bank left interest rates on hold as expected Wednesday, as policymakers continue to evaluate whether its most recent stimulus is enough to offset downward pressure on growth.
The central bank reiterated its forward guidance on interest rates.
"The Governing Council now expects the key ECB interest rates to remain at their present levels at least through the end of 2019, and in any case for as long as necessary," the ECB said in a statement.
With the euro area’s largest economy Germany narrowly avoiding a recession and Brexit uncertainty mounting the ECB has already been forced to backtrack on plans to tighten policy. The central bank is now facing calls to do more even though the root cause of the downturn, weak demand from abroad, is largely beyond its control.
In the latest move in his global trade war, U.S. President Donald Trump on Tuesday threatened to impose tariffs on $11 billion worth of European Union products, while the International Monetary Fund cut its forecast for world economic growth this year.
The ECB meeting was held one day earlier than usual so policymakers can attend the IMF's spring meeting in Washington DC this week.
ECB policymakers are likely to have discussed market speculation about further delays to their first post-crisis rate hike and the side effects of years of negative rates but analysts were not expecting further details of the next Targeted Longer-Term Refinancing Operations (TLTROs) or of any tiering system at the post policy meeting press conference.
“A tiering system might be one of the things that policymakers are looking at but it would probably only be announced if the economy has not started to rebound by June. This suggests a fairly modest reaction in EUR crosses today”, said Petr Krpata, FX strategist at ING.
-- Reuters contributed to this report