By Central Bank News
The European Central Bank (ECB) held its benchmark interest rate on refinancing operations steady at 0.75 percent, as expected.
The ECB, which also held the rate on the marginal lending facility steady at 1.50 percent and the deposit facility at 0.0 percent, had expected by economists to remain on hold but then cut rates over the next few months to help stimulate the euro area’s weak economy.
ECB President Mario Draghi will explain the bank’s decision at a press conference later today.
The ECB cut is key refinancing rate by 25 basis points in July and the rate it pays on overnight bank balances to zero in an effort to entice banks to keep funds in the 17 nation euro zone.
The euro zone economy contracted by 0.2 percent in the third quarter from the second after stagnating in the second quarter, for an annual decline of 0.4 percent.
But the inflation rate, 2.5 percent in October, remains above the ECB’s target of inflation below, but close to 2.0 percent.