European Central Bank holds rates, signals patience on disinflation
Frankfurt holds the main refinancing rate at 3.75 per cent and emphasises a data-dependent approach to further moves.
The European Central Bank held its main refinancing rate at 3.75 per cent on Tuesday and said it would continue to take a data-dependent approach, dampening market expectations of a near-term cut. The ECB president told reporters that wage growth and services inflation remained the two indicators the Governing Council was watching most closely.
Gulf currency markets, where most regional currencies are pegged to the US dollar, reacted modestly. Analysts at regional banks said the ECB's stance reduces the probability that the dollar weakens materially against the euro in the second half of the year, with implications for tourist inflows and dollar-denominated debt issuance in the GCC.