ECB leaves key interest rates unchanged

FRANKFURT AM MAIN: The European Central Bank left its headline interest rates unchanged at historic lows and kept its massive support for the eurozone economy in place at its final meeting of the year Thursday, a spokeswoman said.

The Frankfurt institution held its main refinancing rate at zero percent, the rate on the marginal lending facility at 0.25 percent, and on deposits at -0.4 percent, meaning banks pay to park money with the ECB.

As expected, policymakers announced no changes to the bank's huge asset-buying scheme after they already agreed in October to halve monthly purchases from January as the eurozone economy powers ahead.

"The governing council confirms that from January 2018 it intends to continue to make net asset purchases... at a monthly pace of 30 billion euros, until the end of September 2018, or beyond, if necessary," the bank said in a statement.

The government and corporate bond purchases, along with ultra-low interest rates and cheap loans to banks, are designed to pump cash through the financial system and into the real economy of businesses and households, bolstering economic growth and inflation.

ECB chief Mario Draghi says the extraordinary stimulus measures have played a crucial role in the eurozone recovery and believes the 19-nation single currency zone remains heavily reliant on the bank's cheap money policies.

With inflation still stubbornly low, Draghi has been keen to reassure investors that the bank stands ready to ramp up stimulus again should the economy stumble.

But more hawkish voices insist the humming eurozone economy means markets need to be weaned off the bank's easy money flows.

Attention now turns to Draghi's press conference at 2:30 pm (1330 GMT), when he will unveil the ECB's latest growth and inflation forecasts which are expected to show an upbeat outlook for the 19-nation single currency area.

For the first time, the bank will also release its estimates for 2020.