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ECB holds interest rates, extends liquidity


ECB holds interest rates, extends liquidity


No signs of the European Central Bank ending its economic stimulus measures.

At their monthly meeting the bank’s policymakers reaffirmed that interest rates remain firmly on hold at a record low of one percent into early next year and it will extend lending support for banks for the same period.

That is in response to a lopsided recovery in the euro area and worries about vulnerable banks.

The ECB raising its economic growth forecasts following a strong run of data from core countries, especially Germany.

The problem for the banks policymakers is how to balance a multi-speed recovery among the 16 countries sharing the euro.

The liquidity lifeline is relied on by banks in countries like Spain, Ireland and Greece.

Borrowing from the ECB by banks in these countries hit record highs in recent months even though total lending has fallen about a third since July, highlighting the difficulties still faced by some institutions.

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