European Central Bank (ECB) President Christine Lagarde addresses a news conference on the outcome of the meeting of the Governing Council in Frankfurt, Germany, January 23, 2020.
Ralph Orlowski | Reuters
The European Central Bank announced Thursday it was keeping its interest rates and coronavirus-stimulus program unchanged. It comes despite a stronger euro, which was trading around $1.1835 ahead of the decision.
It has risen by about 5.6% against the the dollar since the start of the year. The currency is closely watched by the central bank as a stronger euro makes imports cheaper, hitting euro zone exporters and tightening financial conditions for the wider economy.
A surprisingly low inflation reading in August, the lowest since 2001, also raised questions about whether the ECB will have to do more to revamp the euro economy.
In June, the ECB forecast annual inflation to reach 0.3% at the end of 2020 — well below its target of almost 2%. It estimated that inflation would pick up to 0.8% in 2021 and 1.3% in 2022.
The central bank also forecast a contradiction in gross domestic product of 8.7% in 2020, followed by a rebound of 5.2% and 3.3% in 2021 and 2022, respectively.
This is a breaking news story and will be updated shortly.