The benchmark interest rate for Europe has been held at 0% since March 2016, with the lending rate held at 0.25% and the rates for deposits held at -0.40%.
The ECB governing council voted to hold rates once again despite an improving economic picture on the continent with headline inflation at 1.5% in March and growth hitting 4.7% in February.
The monthly purchase of €60bn of assets will also continue until December 2017, or longer if the ECB deems it necessary.
In a speech, Draghi said incoming data and surveys had “bolstered” the bank’s confidence that “the ongoing economic expansion will continue to firm and broaden”.
However, he added growth had been dampened by sluggish implementation of structural reforms and said: “The risks surrounding the euro area growth outlook, while moving towards a more balanced configuration, are still tilted to the downside and relate predominantly to global factors.”
James Athey, a senior investment manager at Aberdeen Asset Management said Draghi’s speech offered little to investors or markets, which were unmoved by the announcement.
He said: “It was a pretty confusing and conflicting performance from Mr Draghi. He’s had to acknowledge that the growth outlook has improved and the risks to the outlook are more balanced without following that through into the inflation outlook.
“This is confusing the market and so it is whipping around as traders hang on every word.”
Athey was hopeful of a rate rise in June, but warned people shouldn’t get ahead of themselves.
State Street Global Adviser’s Brendan Lardner, EMEA head of portfolio management in the fixed income team, agreed the ECB could disappoint markets in June by continuing to hold rates.
He said: “Looking forward into the second half of the year, assuming we have negotiated the French election hurdle unscathed, we could see renewed market pricing for accelerated ECB policy normalisation, especially if domestic data continues to impress.
“Nonetheless, if future data acceleration is not accompanied by increasing inflation expectations and rising core inflation, the ECB could disappoint markets by continuing in a holding pattern.”
