The benchmark interest rate has been fixed at 0% since March 2016, while the lending rate was at 0.25% and the rate for deposits at -0.40%.
The ECB also confirmed that it made no changes to its monthly purchase of €60bn assets would continue.
The central bank’s dovishness was largely anticipated by the majority of market commentators.
Although consumer prices in the euro area touched 1.9% in April, inflation in May dropped back down again to 1.4%, missing analysts’ 1.5% target.
However, hours before the ECB meeting, EU statistics agency Eurostat reported the eurozone economy had grown by 0.6% in the first quarter, its fastest quarterly expansion since 2015.
The news chimed with a leaked draft forecast reported on by Bloomberg ahead of the policy-setting meeting, which said the ECB was preparing to cut its inflation outlook after projecting lower consumer price growth at 1.5% across 2017, 2018 and 2019.
Moving forward, investors concurred that the question mark over inflation in the eurozone will be the deciding factor over whether ECB president Mario Draghi decides to raise rates in the future.
“Numerous ECB officials, including Mario Draghi, have highlighted that the pickup in inflation is due to global factors that have since waned,” said Aviva Investors’ head of rates Charlie Diebel.
“The ability to create internal inflation within the eurozone, primarily through higher wages is still unproven.
“Indeed, with stories circulating that the ECB will downgrade its inflation forecasts through to 2019, the door is open for sustained policy support going forward.”
