ECB keeps interest rates at record lows
5 December 2013 Last updated at 14:21 Share this pageEmailPrint
European Central Bank keeps rates at record 0.25% low
The European Central Bank (ECB) has kept its benchmark interest rate at a record low of 0.25%.
The decision follows its surprise cut from 0.5% in November.
ECB president Mario Draghi said the decision to keep the rate at its current level reflected the fact that the eurozone’s economy remained “subdued”.
The eurozone – the 17 countries that use the euro currency – grew by 0.1% in the July-to-September period.
This compares with 0.3% growth in the previous quarter.
In a news conference following the announcement, Mr Draghi confirmed the ECB’s forward guidance that the interest rate would remain at the same level or lower for the foreseeable future.
Prices remained “subdued”, he said, despite the recent increase in the eurozone inflation rate from 0.7% to 0.9%.
“Our monetary policy decisions are taking time to make their influence felt,” he said.
The ECB has reduced its benchmark interest rate consistently since 2008, when it stood at 3.75%, in response to the region’s sustained debt crisis and contracting economy.
This refinancing rate determines what banks pay to borrow from the ECB and influences borrowing costs for businesses and consumers.