European Central Bank Holds Rate at 0.25 Percent

March 6, 2014 Share Print 0

The European Central Bank (ECB) has kept its benchmark interest rate at its record low of 0.25%.

The bank slightly raised its forecast for growth to 1.2% in 2014, but dropped its inflation estimate.

Eurozone interest rates have remained unchanged since November 2013, when the bank said it expected “a prolonged period of low inflation”.

In February, eurozone inflation was at 0.8%, well below the ECB’s 2% target, which has prompted deflation worries.

However, the ECB has been confident that eurozone economies are recovering from recession.

The bank decided to leave the rate unchanged as there were continued signs of recovery, ECB president Mario Draghi told a news conference in Frankfurt.

“We saw our baseline by and large confirmed,” he said. “There is a continuation of a modest recovery.”

via BBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.