No changes from ECB on euro zone rates

October 2, 2014

Frankfurt (Oct 2)  The European Central Bank left interest rates unchanged today, holding them at record lows while it rolls out several measures it hopes will see off the spectre of deflation and revive the euro zone economy.

The decision to leave rates on hold was widely expected after the ECB cut them to rock-bottom levels last month.

The bank's president, Mario Draghi, said after the move that: "Now we are at the lower bound".

At today's meeting, which is being held in Naples instead of at the bank's headquarters in Frankfurt, the ECB left its main refinancing rate at 0.05%.

It also kept the rate on bank overnight deposits at -0.2%, which means banks pay to leave funds at the central bank.

It held its marginal lending facility - or emergency borrowing rate - at 0.3% at today's meeting.

Markets now turn their attention to Draghi's news conference, at which he is expected to give a more detailed explanation of the ECB's decision and to flesh out the bank's plans to buy asset-backed securities (ABS).

Meanwhile, hundreds of protesters faced off riot police today outside the Capodimonte palace in the southern Italian city where the ECB is holding its monthly meeting.

Italian television pictures showed police in riot gear barring the protesters from the grounds of the 18th century former royal palace.

Demonstrators chanted slogans and marched behind a banner reading "Job insecurity, poverty, unemployment, speculation. Free us from the ECB!".

Speakers said they were angry at spending cuts, job losses and austerity policies they said were imposed by Brussels.

Italy, in its third recession in six years, is going through a slump which the government says has now led to an economic contraction deeper than the Great Depression of 1929 with the south of Italy particularly severely affected.

Soiurce:  RTEnews

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