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1st LD Writethru: ECB keeps interest rates unchanged, to announce further monetary policy measures

Xinhua, January 22, 2015 Adjust font size:

The European Central Bank decided on Thursday to keep interest rates unchanged at historically low level and was expected to announce a quantitative easing program later.

ECB said in a statement that the refinancing interest rate, overnight lending interest rate and deposit interest rate would remain unchanged at 0.05 percent, 0.30 percent and minus 0.20 percent respectively.

"Further monetary policy measures will be communicated by the President of the ECB at a press conference starting at 2:30 p.m. CET (1330 GMT) today," it said.

ECB President Mario Draghi was expected to announce a quantitative easing program, print money to purchase government bonds, in the press conference in a bid to address the prolonged low inflation in the euro zone.

Annual inflation rate in the common currency area dipped to a negative territory in December 2014 despite ECB's previous stimulating efforts of cutting interest rates and buying private sector bonds and asset-backed securities.

Consumer prices shrank by 0.2 percent annually in December, significantly lower than ECB's consumer prices growth maintenance target of "below, but close to 2 percent."

Analysts said the quantitative easing was the last policy instrument the ECB could use in order to save the euro zone from falling into deflation spiral. Endit