October 5, 2012 3:31 AM EST
ECB holds main interest rate at record low of 0.75%
The European Central Bank (ECB) Thursday decided to keep its main interest rate unchanged at a record low of 0.75%.
The Governing Council of the ECB also decided that the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 1.50 and Zero % respectively, said an ECB statement.
At a press conference held in Brdo pri Kranju, around 30 km away from the Slovenian capital Ljubljana, ECB President Mario Draghi said the ECB policymakers did not discuss a possible rate cut in the near term at their meeting.
He said the inflation expectations for the euro area continue to be firmly anchored in line with the aim of maintaining inflation rates below, but close to 2% over the medium term.
Economic growth in the EuroArea is expected to remain weak, with ongoing tensions in some Eurozone financial markets and high uncertainty still weighing on confidence and sentiment, he said.
“We are ready to undertake Outright Monetary Transactions (OMTs), once all the prerequisites are in place,” Draghi said.
The Governing Council will consider entering OMTs to the extent that they are warranted from a monetary policy perspective as long as program conditionality is fully respected, he said.
According to Draghi, the ECB’s OMTs decisions have helped to alleviate such tensions over the past few weeks and reduced concerns about the materialization of destructive scenarios.
It is now essential that governments continue to implement the necessary steps to reduce both fiscal and structural imbalances and proceed with financial sector restructuring measures, he said.
The ECB announced on Sept. 6 that it would conduct OMTs on the secondary market to buy sovereign bonds of Eurozone countries in order to ensure the transmission of the monetary policies of the ECB.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.