The market did not react to the decision on the key European rate

Following the meeting, the European Central Bank (ECB) kept the key rate unchanged at 0.25%. In anticipation of the speech of the head of the ECB, Mario Draghi, investors refrained from active actions in the stock market.

At its meeting today, the ECB decided to keep the base rate at 0.25%. In addition, the regulator left unchanged the deposit rate at zero and the loan rate at 0.75%.

This decision by the European financial regulator was expected: analysts agreed that the ECB base rate would not be lowered due to the improving economic situation in the region and low growth rates in consumer prices. According to the latest data from Markit Economics, the eurozone manufacturing PMI rose from 52.7 to 54 points in January. At the same time, inflation in the region slowed in January to 0.7%, which is 0.1 percentage point lower than December values. “The latest statistics for the eurozone do not give the ECB a reason to revise its inflation forecast, and tensions in money markets are easing,” Goldman Sachs analyst Dirk Schumacher told Bloomberg. “We do not expect any decisions at the end of the upcoming meeting, although the tone of the press is "The conference is likely to be mild."

The reaction of financial markets was weak and short-lived. The euro exchange rate, which had been declining for most of the day, rose 0.2% ten minutes after the ECB's decision was announced, to $1.3535 per 1 euro, but remained at the level of Wednesday's close. Subsequently, the decline resumed, and by 15.00 Kyiv time the euro exchange rate dropped to $1.3535 per 1 euro, which is 0.25% lower than Wednesday’s close. The reaction on European stock markets was also short-lived. The leading European indices, which fell by 0.3–0.5% after the announcement of the meeting results by 15.10 Kyiv time, regained most of the decline.

Vitaly Gaidaev

Investors did not notice the ECB