ECB holds key interest rates unchanged

By Aysu Bicer

ANKARA (AA) - The European Central Bank (ECB) on Thursday decided to keep interest rates stable, reiterating its stance on holding historically low rates until Eurozone inflation reached a 2% target.

Interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50%, respectively, according to a statement by the ECB's Governing Council.

"The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon," it said.

The bank reiterated last month's decision to restart net purchases under the Governing Council’s asset purchase programme (APP) at a monthly pace of €20 billion ($22 billion) as from Nov.1.

Speaking at a news conference in Frankfurt, the bank's head Mario Draghi said: "The Council reiterated the need for a highly accommodative stance of monetary policy for a prolonged period of time to support underlying inflation pressures and headline inflation developments over the medium term."

He noted that ongoing employment growth and increasing wages continue to underpin the resilience of the euro area economy, adding that policy measures decided at the bank's last meeting provided substantial monetary stimulus, which would contribute to further easing in borrowing conditions for firms and households.

"This will support the euro area expansion, the ongoing build-up of domestic price pressures and, thus, the sustained convergence of inflation to our medium-term inflation aim," he said.

Holding his last meeting, eight-year ECB chief Draghi will be succeeded by former IMF chief Christine Lagarde at the end of this month.