Frankfurt--The European Central Bank held its key interest rates steady as expected at its policy meeting on Wednesday, as signs multiply that its monetary medicine is slowly beginning to work.
The ECB's governing council, meeting a day earlier than usual because of the meetings of the World Bank and International Monetary Fund at the weekend, voted to hold the benchmark "refi" refinancing rate steady at its current all-time low of 0.05 percent.
The two other key rates -- on the deposit and marginal lending facilities -- were also unchanged at -0.2 percent and +0.3 percent, respectively.
ECB chief Mario Draghi was expected to explain the reasoning behind the decision at his usual post-meeting news conference.
But analysts said he was unlikely to announce any new changes in policy, but will underline instead the positive effects of a raft of different policy measures recently, including a contested sovereign bond purchase programme launched last month.
And he will be at pains to emphasise that there are no plans to "taper" the measures any time soon, analysts said.
"After leaving interest rates on hold today, the ECB is likely to dampen speculation that its quantitative easing programme may not be implemented in full," said Capital Economics economist Jessica Hinds.
Quantitative easing or QE is a massive 1.1-trillion-euro ($1.2 trillion) sovereign bond purchase scheme aimed at bringing area-wide inflation back up to levels consistent with healthy economic growth.
Under the programme, the ECB aims to buy 60 billion euros of bonds per month until September 2016.
The scheme has its critics, not least the head of the German central bank or Bundesbank, Jens Weidmann, who fear it will lessen pressure on governments to get their economies and finances in order.
Opponents are likely to argue for an early roll-back of the programme as the eurozone recovery picks up speed.
AFP
