ECB keeps rates unchanged as investors await QE details

By Stefan Riecher

The European Central Bank kept interest rates unchanged at record lows as investors wait for President Mario Draghi to reveal more details of his 1.1 trillion-euro ($1.2 trillion) bond-buying plan.

The 25-member Governing Council left the main refinancing rate at 0.05 percent at its meeting on Thursday in Nicosia. The decision was predicted by all 54 economists in a Bloomberg News survey. The deposit rate remained at minus 0.2 percent and the marginal lending rate at 0.3 percent.

Draghi is set to unveil the starting date for government- bond purchases and other elements of quantitative easing at his press conference. He'll also present the ECB's new growth and inflation forecasts, which will run through 2017 for the first time and help investors judge how long QE might last.

"We have heard very few details as to the operational modalities of the purchases," said Anthony O'Brien, a fixed- income strategist at Morgan Stanley in London. "We do expect President Draghi to shed more light on the policy framework."

When the ECB said on Jan. 22 that it'll start QE, Draghi pledged to buy 60 billion euros of assets a month through September 2016 or until officials see a "sustained adjustment in the path of inflation" toward their goal of just under 2 percent.

Inflation path

The euro weakened to an 11-year low against the dollar on Thursday, dropping 0.1 percent to $1.1072 at 2:03 p.m. in Frankfurt.

Unknowns include how the ECB will taper the program when needed, and how data on purchases will be made public. Also unresolved are to what extent it'll purchase bonds with negative yields, and how to treat national central bank losses from buying them.

Draghi...