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July 28, 2021

ECB leaves key rate unchanged

The European Central Bank (ECB) left its key interest rate unchanged at 0.75 percent Thursday, CNBC informs. ECB will draw up a mechanism in the coming weeks to make outright purchases to stabilize stressed euro zone borrowing costs, ECB President Mario Draghi said yesterday. “The Governing Council will consider further non-standard monetary policy measures according to what is required to repair monetary policy transmission. In the coming weeks we will design the appropriate modalities for such policy measures.” Draghi also said euro zone economic growth is weak and uncertainty about the outlook is weighing on confidence in the bloc. “Economic growth in the euro area remains weak,” Draghi told. He also said the euro crisis would not destroy the currency. After the decision, the euro rose against the U.S. dollar to USD 1.2285 from USD 1.2264 before, while European shares pared gains. The ECB also left the interest rate on its deposit facility at 0.0 percent—a low it went to for the first time last month to encourage banks to lend overnight to other banks, where they receive a higher rate, currently about 0.1 percent.

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