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ECB leaves rates unchanged despite German criticism

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ECB leaves rates unchanged despite German criticism
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There was no change in the cost of borrowing from the European Central Bank after its latest policy meeting, with ECB head Mario Draghi ignoring criticism from Berlin over his moves to try to stimulate the eurozone economy and boost inflation.

The key benchmark interest rate remains at a record low zero as the ECB pumps newly printed money into the banking system by buying billions of euros worth of bonds from banks.

German Finance Minister Wolfgang Schaeuble has said its policies are causing “extraordinary” problems for Germany and particularly the country’s small savers. He also said they have fuelled the rise of the eurosceptic AfD party.

Late on Wednesday, Schaeuble stuck to this tough line, saying that “a long period with zero and negative interest rates is not a sensible situation”.

For now the ECB seems to have the edge in the debate after Schaeuble backtracked on some of his comments and Bundesbank chief Jens Weidmann, the ECB’s biggest critic to date argued that its stance was appropriate.

The euro rose against the dollar as the ECB held interest rates unchanged.

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