By Central Bank News
The European Central Bank (ECB) kept its key interest rate unchanged at 0.75 percent, surprising most economists who had expected the bank to cut the rate or provide further stimulus to the ailing euro zone.
The ECB said in a statement that its president, Mario Draghi, would provide further comments at a press conference. The bank also maintained its other key rates – the rate on marginal lending at 1.5 percent and a zero rate on its deposit facility – unchanged.
Expectations about further stimulus were stoked last week following Draghi’s comments that the ECB would “do whatever it takes to preserve the euro,” within its mandate.
The ECB cut its refinancing rate by 25 basis points on July 5.
The inflation rate in the 17-nation euro zone was steady at 2.4 percent in June but the economy in contracted 0.1 percent in the first quarter from the same 2011 quarter, and the unemployment rate remained at a record high of 11.2 percent in June. Unemployment varies greatly across the euro area, with a rate of 24.8 percent in Spain and 4.5 percent in Austria.
