ECB leaves key rate unchanged

Associated Press

FRANKFURT, Germany (AP) — European Central Bank head Mario Draghi is reassuring markets that the bank is nowhere near ending its stimulus measures for the weak eurozone economy.

The ECB president said Thursday that the bank's interest benchmark rate for the 17 European Union countries that use the euro will stay low "for as long as necessary," adding that that meant rates would be the same or lower for "an extended period of time."

Draghi offered the statement as a form of so-called forward guidance — an attempt to build market confidence by making clear what course the central bank will follow. The U.S. Federal Reserve has used the tool by saying rates will remain near zero until unemployment falls to 6.5 percent.

Calling the guidance "unprecedented," Draghi, however, did not link it to a numerical target as the Fed did. Rates would stay low as long as inflation and the economy remain weak, he added.

Draghi spoke after the bank left the rate for the 17 European Union countries that use the euro at a record low of 0.5 percent

The ECB's stance on stimulus measures contrasts with that of the Fed, which has said it could begin phasing out its bond-buying program to stimulate the economy this year if the U.S. economy keeps growing as expected.

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