ECB leaves euro rate unchanged

The European Central Bank has left its interest rates unchanged at the latest monthly meeting it held.The organisation has left its refinancing operations rate at a single per cent.

The decision follows two consecutive months of cuts to rates, which were aimed at trying to boost the currency bloc's struggling growth.During a news conference, the president of the ECB, Mario Draghi, commented that the eurozone economy is still experiencing a period of high uncertainty with substantial downside risks.

Numerous analysts have predicted that further rate cuts for later in the year are on the horizon. Richard Driver, of Caxton FX, commented that it must be kept in mind that the eurozone is probably on its way into recession with risks of deflation material, which means that it wouldn't come as a great shock if we were to see another rate cut just before Q1 ends, particularly with a focus on eurozone growth emerging from EU leaders.

Driver added that Draghi's reference to a balance in deflation risks might lead to some reviewing expectations.

Yesterday, the Bank of England maintained its interest rates at an unchanged 0.5 per cent, where they have stood since March of 2009. The ECB's benchmark rate hasn't dropped below a single per cent since it started setting the rates 13 years ago.

The ECB relaxed rules on what collateral it will accept when lending money to banks while also announcing new and cheaper three-year loans that are now known as LTRO – long-term refinancing operations.