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Draghi rules out early rate rise

Thursday, August 01, 2013 - 02:17

Aug.1 - The European Central Bank leaves its main interest rate unchanged at a record low of 0.50 percent as one Frankfurt trader says the decision came as no surprise, predicting a rate cut for autumn. (ROUGH CUT - no reporter narration)

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The European Central Bank (ECB) held interest rates at a record low of 0.50 percent on Thursday (August 01), a decision markets had expected. Euro zone private industry unexpectedly bounced back to growth in July. Factories increased output for the first time in well over a year, business surveys showed. Euro zone inflation was steady at 1.6 percent in July. The ECB's goal is just below 2 percent. The ECB also left the rate on its deposit facility at 0.0 percent and held its marginal lending facility - or emergency borrowing rate - at 1.00 percent. (SOUNDBITE) (English) ECB PRESIDENT, MARIO DRAGHI, SAYING: "Based on our regular economic and monetary analysis, we decided to keep the key ECB interest rates unchanged. Incoming information has confirmed our previous assessment. Underlying price pressures in the euro area are expected to remain subdued over the medium term." "Recent confidence indicators based on survey data have shown some further improvement from low levels and tentatively confirmed the expectation of a stabilisation in economic activity." "The governing council confirms that it expects the key ECB interest rates to remain at present or lower levels for an extended period of time." "The overall improvements in financial markets seen since last summer appear to gradually be working their way through the real economy as should the progress made in fiscal consolidation." "Overall, euro area economic activity should stabilise and recover at this low pace. The risks surrounding the economic outlook for the euro area continue to be on the downside." "Recent developments in global money and financial market conditions and related uncertainties may have the potential to negatively affect economic conditions." "Liquidity will remain abundant. It will stay ample as needed, as long as needed so as to guarantee full access to banks and the fixed rate full allotments will stay in place at least until July 2014 although, let me tell you, there is no connection between this date and the extended period of time to which the forward guidance refers."

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Draghi rules out early rate rise

Thursday, August 01, 2013 - 02:17