Financial Times
February 9, 2012
The European Central Bank has left official interest rates unchanged at their record low, ahead of a second offer to eurozone banks of unlimited three-year loans.
The ECB governing council’s decision at a meeting in Frankfurt to leave the main policy rate unchanged at 1 per cent was widely expected. Mario Draghi, the ECB president, said cutting rates was not discussed at the meeting.
At the regular press conference after the meeting, Mr Draghi broke the news that Greek leaders had agreed a deal to save the economy from default. Commenting on the deal, the ECB president said he was “quite confident that all the pieces will fall in the proper places.”
However, Mr Draghi was reluctant to show the ECB’s hand on its plans for its holdings of Greek government bonds ahead of a meeting of eurozone finance ministers in Brussels on Thursday evening. The ECB president ruled out accepting losses, but did not rule out forgoing profits on the debt, which it acquired at an estimated cost of €40bn under a bond purchasing programme introduced in 2010 by Jean-Claude Trichet, Mr Draghi’s predecessor.
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