- Jens Kramer, an economist at NordLB
The European Central Bank left benchmark interest rate unchanged today and announced specifics of its bond-buying plan to save the shared currency. During today's meeting in Frankfurt, region's policy makers left the key rate at a record low of 0.75 per cent, meeting analysts' expectations.
"The ECB is keeping its powder dry for now and will probably cut rates next month," Jens Kramer, an economist at NordLB in Hanover, said before the decision.
"All eyes are on the bond plan today. Cutting rates won't really have an impact, but it would be an additional signal that the ECB will throw its full arsenal at saving the euro."
"A rate cut would have been understandable given the weak economic data, but clearly the ECB wants to address the main risk first, the convertibility risk, which the ECB will try to attack with a new bond purchase program, if governments play along," said Stefan Schilbe, chief economist at HSBC Trinkaus.
The Stoxx Europe 600 Index advanced 2.33 per cent to 271.67. Germany's DAX Index gained 2.91 per cent to 7,167.33 and France's CAC 40 Index rose 3.06 per cent to 3,509.88.
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