European Central Bank retains 1% interest rate

PanARMENIAN.Net - The European Central Bank kept interest rates on hold and altered its assessment of risks to the economic outlook as investors focus on the bank’s possible role in helping Greece avoid default.

“The economic outlook remains subject to high uncertainty and downside risks,” ECB President Mario Draghi said at a press conference in Frankfurt today, Feb 9, after policy makers left the benchmark interest rate at a record low of 1 percent. Last month, he said the outlook was subject to “substantial” downside risks.

Draghi will be questioned on whether the ECB intends to use its Greek bonds to help the embattled nation reduce its debt. While the ECB has remained silent on its plans, options canvassed range from selling its Greek bonds at the discount price it paid for them to taking a loss on the Greek assets held in investment portfolios, two euro-area officials said late last week on condition of anonymity, Bloomberg reported.