Mario Draghi bows out of ECB with rates unchanged
Bank president is first never to raise rates during his tenure
European Central Bank president Mario Draghi has maintained the bank’s interest rates at their current level.
In his final meeting as ECB head, Mr Draghi announced that the benchmark borrowing rate will remain at zero while banks will face negative interest rates of -0.5 per cent putting their cash with the bank rather than lending it.
The ECB said: “The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 per cent within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
Draghi will be succeeded by former chair of the International Monetary Fund (IMF) Christine Lagarde.
Unlike any of his predecessors, Draghi was never able to raise interest rates during his eight-year tenure, presiding over a period of record low rates and easy monetary policy. Only last month Draghi cut the interest rate on bank reserves and resumed quantitative-easing (QE) announcing that the ECB will purchase €20bn-worth ($22bn) of bonds a month.