By www.CentralBankNews.info The European Central Bank (ECB) held its benchmark refinancing rate steady at 0.50 percent, as expected, along with its interest rate on the marginal lending facility at 1.0 percent and its deposit rate at 0.0 percent.
As in the past, the ECB said it would comment on the decision by its Governing Council at a press conference later today.
At its previous meeting in June, the ECB revised downwards its 203 forecasts for growth and inflation and said that it expects the 17-nation euro area to recover during the year, though at a subdued pace.
The euro zone’s Gross Domestic Product contracted by 0.2 percent in the first quarter from the previous quarter – the sixth quarterly contraction in a row. On an annual basis, the GDP shrank by 1.1 percent, up from a 1.0 percent drop in the fourth quarter.
Inflation in the euro ara rose to 1.6 percent in June, the third monthly rise since falling to a low of 1.2 percent in April.
Last week, ECB President Mario Draghi said the economic outlook for the euro zone still warranted an accommodative policy stance and an exit from that was “still distant.” In May the ECB cut its refi rate by 25 basis points.