ECB holds key refi interest rate steady at 0.05%

GMT 12:50 2015 Thursday ,16 July

Arab Today, arab today ECB holds key refi interest rate steady at 0.05%

The European Central Bank
Frankfurt - AFP

The European Central Bank held its key interest rates steady, as expected, at its regular policy meeting on Thursday, a spokesman said.

The ECB's governing council voted to keep the benchmark "refi" refinancing rate at its current all-time low of 0.05 percent, the spokesman said.

The other key interest rates -- on the marginal lending facility and the deposit facility -- were also left unchanged at 0.30 percent and minus 0.20 percent respectively.

Analysts had not expected any rate changes or additional policy moves this week, when Greece was set to be the main topic of conversation, especially whether the ECB should continue to keep its cash-strapped banks afloat.

Overnight, Greek Prime Minister Alexis Tsipras overcame a major mutiny in his radical left Syriza party and won parliamentary approval for a series of unpopular reforms demanded by international creditors.

As anti-austerity protesters clashed with police on the streets of Athens, Tsipras was forced to rely on pro-European opposition parties to win approval for the measures that include sweeping changes to taxes, pensions and labour rules.

At the ECB's regular post-meeting news conference, president Mario Draghi was likely to face a grilling over the ongoing provision of Emergency Liquidity Assistance or ELA to Greek banks in the light of latest developments in Greece, analysts said.

The ELA facility has been the life support machine for the Greek economy for weeks now.

Strictly speaking, ELA is only available for banks that are solvent -- a condition looking increasingly shaky for many Greek lenders following massive capital flight and subsequent capital controls.

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