Finland Times

Photo AFP-Lehtikuva

The European Central Bank (ECB) on Thursday held fire and kept the interest rates unchanged after it unveiled a package of monetary easing measures last month.

    

The combination of monetary policy measures decided last month has already led to a further easing of the monetary policy stance, said the ECB President Mario Draghi at the press conference here.

    

The euro area economy continued its moderate recovery in the second quarter and inflation expectations for the euro area over the medium to long term continue to be firmly anchored in line with the ECB's aim.

    

"...the key ECB interest rates will remain at present levels for an extended period of time in view of the current outlook for inflation," he said.

    

The ECB lowered all the interest rates and brought the overnight deposit interest rate to a negative territory. At the same time, it also announced in June that it would conduct targeted longer-term refinancing operations, known as TLTROs, in order to provide more liquidity to the banks and encourage them to lend more to the real economy in the euro area.

    

"The aim of the TLTROs is to enhance the functioning of the monetary policy transmission mechanism by supporting lending to the real economy," said Draghi.

    

The ECB published the modalities for the TLTROs on Thursday.

    

The inflation rate for the euro area, according to Eurostat's flash estimate, still remained at a low level of 0.5 percent.

    

With regard to the assessment of banks' balance sheet, Draghi said banks should take full advantage of this exercise to improve their capital and solvency position.

    

He also renewed his call for the euro area governments to proceed with structural reforms in the coming years.