ECB Watching Global Market Turmoil Closely

The European Central Bank kept interest rates on hold Thursday but said it was watching global market turmoil closely and was ready to act if prices weaken further.

The bank held its main rate at a record low of 0.25% for a third month running. President Mario Draghi said the bank needed more time to understand why inflation fell again in January, and to assess the impact of emerging market turmoil on the European economy.

“The reason for today’s decision not to act has to do with the complexity of the situation … and the need to acquire more information,” Draghi said at a news conference.  Economists were divided over whether the ECB would cut rates, with some arguing the bank was more likely to wait for updated growth and inflation forecasts in March.


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