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ECB holds eurozone interest rates amid growth worries | ECB holds eurozone interest rates amid growth worries |
(about 1 hour later) | |
The European Central Bank has kept its benchmark interest rate at 0.15%. | |
After announcing measures in June to kick-start eurozone growth, the ECB says it will now keep rates low "for an extended period of time in view of the current outlook for inflation". | |
And ECB president Mario Draghi warned there would be a "continued moderate and uneven recovery" in the eurozone. | |
On Ukraine, he said it would closely monitor the effects of "geopolitical risks" on the modest economic recovery. | |
The ECB cut its benchmark rate from 0.25% to 0.15% in June, and also became the first major central bank to introduce negative interest rates. | The ECB cut its benchmark rate from 0.25% to 0.15% in June, and also became the first major central bank to introduce negative interest rates. |
The deposit rate for banks depositing money with the ECB went from zero to -0.1%. The aim was to encourage banks to lend to businesses rather than hold on to money. | The deposit rate for banks depositing money with the ECB went from zero to -0.1%. The aim was to encourage banks to lend to businesses rather than hold on to money. |
The ECB also announced in June that long-term loans were to be offered to banks at cheap rates until 2018 in another attempt to boost banks' lending to companies. | The ECB also announced in June that long-term loans were to be offered to banks at cheap rates until 2018 in another attempt to boost banks' lending to companies. |
With Italy now officially back in the recession, and France's President Francois Hollande warning about a "real deflationary risk" in Europe, the ECB is under pressure to ensure the eurozone's slowdown does not become entrenched. | With Italy now officially back in the recession, and France's President Francois Hollande warning about a "real deflationary risk" in Europe, the ECB is under pressure to ensure the eurozone's slowdown does not become entrenched. |
The latest eurozone inflation figures showed the inflation rate for the bloc dropped to 0.4% in July. That was the lowest rate since October 2009 and well below the ECB's target of close to 2%. | The latest eurozone inflation figures showed the inflation rate for the bloc dropped to 0.4% in July. That was the lowest rate since October 2009 and well below the ECB's target of close to 2%. |