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ECB leaves key interest rates unchanged and bond buying intact
[FRANKFURT] European Central Bank governors on Thursday left key interest rates at historic lows and mass bond-buying unchanged, a spokesman said, in line with observers' expectations.
The Frankfurt institution kept its main refinancing rate at 0.0 per cent, the rate on the marginal lending facility at 0.25 per cent, and the deposit rate at -0.4 per cent - meaning banks have to pay to park money with the central bank.
It also left untouched plans to buy 60 billion euros (S$91.3 billion)of corporate and government bonds per month until December under its "quantitative easing" programme.
ECB watchers had expected the bank to hold steady at this month's meeting, as political uncertainty and weak inflation discourage it from reducing its massive support for the economy.
The bank's interventions are designed to encourage banks to lend to the real economy, powering growth and pushing inflation towards its target of just below 2.0 per cent.
But while policymakers see a firming recovery in the 19-nation eurozone, inflation fell back to 1.5 per cent in March after briefly overshooting the goal in February.
Just minutes before the ECB's decision Germany, Europe's biggest economy, reported that its inflation rate had reached the ECB target of 2.0 per cent in April.
Meanwhile, governors are anxious not to upset financial markets while eurozone heavyweight France navigates a high-stakes presidential election, which far-right anti-euro candidate Marine Le Pen has a real chance of winning.