News Column

ECB Left Interest Rates on Hold

October 4, 2012

The European Central Bank on Thursday left its interest rates on hold, ahead of a news conference where its president, Mario Draghi, was expected to detail progress in bringing an end to the eurozone's long-running debt crisis.

Financial markets have been nervous for days, amid speculation that Spain may try to sit out the crisis, rather than turning to the ECB for help which was offered a month ago.

The ECB governing council met at a castle near the Slovenian capital Ljubljana under a policy of holding two meetings each year outside the ECB's Frankfurt headquarters.

The announcement, 45 minutes before Draghi's news conference scheduled for 1230 GMT, left the benchmark refinancing rate at the record low of 0.75 per cent set by the ECB in July.

The main Frankfurt stock index, the DAX, which had been running at 7,315 just before the announcement, rose slightly after the decision.

The Bank of England meanwhile left the key interest rate for sterling unchanged at 0.5 per cent and refrained from pumping more money into the British economy.

Draghi calmed markets last month with a promise to do "whatever it takes" through an emergency bond-buying programme to help cash-strapped eurozone nations, provided they accept external supervision from the eurozone's bailout agency.

Separately, talks between international lenders and Greece on whether Athens' cost-cutting moves are working have reached their final stages.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH