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ECB keeps eurozone rates unchanged


ECB keeps eurozone rates unchanged


The European Central Bank has left interest rates unchanged at a record low of one percent.

Persistently high inflation meant Bank policymakers decided not to cut the cost of borrowing to stimulate the eurozone’s shaky economic recovery.

Financial markets are now looking to a news conference by ECB President Mario Draghi for hints on how long the central bank is planning to keep its wait-and-see stance on interest rates.

“After cutting interest rates only a few months ago, the ECB is now in wait-and-see mode, also to assess the impact of the three-year loans,” Commerzbank economist Michael Schubert said. “It will take several months until this shows up in lending to the real economy.”

The ECB has pumped over one trillion euros into the financial system with twin three-year funding operations, known as LTROs, to head off a credit crunch that late last year risked exacerbating the euro zone crisis and jeopardising the currency project.

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