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ECB keeps money taps open as Draghi denied grand finale

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The European Central Bank kept its ultra-easy monetary policy unchanged on Thursday, ending Mario Draghi's eight-year tenure at the bank in exactly the same place he started: trying to prop up a perpetually ailing currency bloc.

[FRANKFURT] The European Central Bank kept its ultra-easy monetary policy unchanged on Thursday, ending Mario Draghi's eight-year tenure at the bank in exactly the same place he started: trying to prop up a perpetually ailing currency bloc.

With growth barely holding in positive territory and the outlook darkening, it is hardly the grand finale hoped for by Mr Draghi, whose 2012 promise to do "whatever it takes" to save the euro - code for rescuing heavily indebted countries - is credited with saving the shared currency from collapse.

With inflation languishing at less than half the ECB's target and little hope for a speedy rebound, Mr Draghi even kept the door open to more stimulus on Thursday, days before he hands the reins to new ECB President Christine Lagarde.

At his last news conference as ECB chief, Draghi is expected to defend last month's stimulus package, pushing back on unusually open criticism from rebels within the bank's own Governing Council against his brand of aggressive money-printing.

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The spat has taken the shine off an otherwise remarkable eight-year reign in which Mr Draghi led the ECB in an unprecedented experiment with unconventional monetary policy that helped avert deflation and stopped a debt crisis from spiralling out of control.

At Thursday's meeting, also attended by Ms Lagarde, the ECB kept its benchmark deposit rate unchanged at minus 0.5 per cent. It also reaffirmed that its open bond purchases will start in November, at a rate of 20 billion euros per month and will run "as long as necessary".

Expecting no change, financial markets were calm after the decision, with the euro little changed against the dollar at 1.1123 and German 10-year yields at -0.382 per cent.

REUTERS