04 October 2012 12:45 [Source: ICIS news]
LONDON (ICIS)--The European Central Bank (ECB) held its key interest rate at a record low of 0.75% on Thursday, as the bank awaits a decision on whether Spain will request aid.
The bank is also said to be in the process of analysing the ongoing market impact of its bond-buying scheme, announced on 6 September, before making any decisions on a shift in interest rates.
The ECB scheme involves attempting to stabilise the eurozone through the purchase of short-term government debt from countries whose governments have requested assistance, a process the bank has termed Outright Monetary Transactions (OMTs).
Any bond purchases would be made on the secondary market, and their impact would be “sterilised” by the ECB removing as much money as it spends on the programme through other parts of the eurozone economic system. Assistance is contingent on governments meeting certain economic reform obligations.
Luis de Guindos, Spain’s economy minister, said this week that the country will not make a decision on requesting aid until the terms of ECB assistance have been set out.
The ECB’s key interest rate has been held at 0.75% since 5 July this year. Prior to that, it had stood at 1% for six months.
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