By CentralBankNews.info
The European Central Bank (ECB) maintained its benchmark refinancing rate at a record low of 0.25 percent, as expected by most economists, along with its other main rates, including the marginal lending facility rate at 0.75 percent and the deposit rate at 0.0 percent.
In a brief statement following a meeting of the ECB’s governing council, the bank said Mario Draghi, ECB president, would comment on the reason for the decision at a press conference.
At the press conference, Draghi will present the ECB’s latest economic forecasts, including its projection for 2016.
Despite the recent improvement in the euro area’s economy, Draghi has said in recent months that inflation will remain low for “a prolonged period” and provided the guidance that rates will be kept “at present of lower levels for an extended period of time.”
Last month, Draghi also said the ECB was ready to consider all available instruments and “to take further decisive action if required” to ensure that higher money market rates don’t raise the cost of financing for businesses and thus prevent a faster economic recovery.
Inflation in the 18-nation euro zone was steady at 0.8 percent in February, the same as in January and December, and well below the ECB’s target of inflation that is below, but close to 2 percent.
In its current forecast, which will be updated later today, the ECB forecasts average inflation of 1.1 percent in 2014 and 1.3 percent in 2015.
The Gross Domestic Product of the euro area expanded by 0.3 percent in the fourth quarter of 2013 from the third quarter for annual growth of 0.5 percent, the first quarter in eight quarters that the growth rate has been positive.
The ECB currently forecasts economic growth of 1.1 percent in 2014 and 1.5 percent in 2015.
