ECB holds key interest rate steady at 1.0%
The European Central Bank held its key interest rates steady, as expected today, leaving eurozone borrowing costs at the historic lows they have been at since December.
The ECB's policy-setting governing council voted to leave the rate for its main refinancing operations unchanged at 1.0 percent at its regular policy meeting, held this month in Barcelona instead of the normal venue of Frankfurt.
No analysts had expected a rate cut or further anti-crisis measures this month, following a raft of recent policy steps to prop up the euro and keep the single currency area's debt-wracked economy up and running.
The central bank reversed last year's rate hikes to bring eurozone borrowing costs back down to an all-time low of 1.0 percent and embarked on a hotly contested programme of buying up the bonds of debt-mired countries so as to ease their borrowing costs.
Most recently, two so-called long-term refinancing operations (LTROs) in December and February pumped more than 1.0 trillion euros ($1.3 trillion) into the banking system in a bid to avert a dangerous credit squeeze.
An 8,000-strong security force was deployed in Barcelona for the meeting and the authorities temporarily reintroduced border controls to prevent the entry of potential trouble-makers.
There were no signs of trouble outside the meeting venue, however, where a only a small handful of banner-wielding protesters could be seen.
With unemployment running at a record 24.4 percent and the country officially back in recession, pressure for Spain to stabilise its public finances is driving spending cuts and unpopular austerity measures that are fuelling social unrest.
Nevertheless, ECB watchers believe the central bank's patience is wearing thin as a growing number of governments are beginning to baulk at the belt-tightening measures prescribed under the recently agreed "fiscal compact," complaining that austerity risks undercutting growth.