The European Central Bank kept interest rates on hold today as President Mario Draghi waits for Spain to decide if it needs his help.
Policy makers meeting in Ljubljana, Slovenia, left the benchmark rate at a historic low of 0.75 percent, as predicted by 48 of 52 economists in a Bloomberg News survey. Four forecast a cut to 0.5 percent. Draghi will brief reporters on the decision, taken at one of the ECB’s twice-yearly meetings outside Frankfurt, at 2:30 p.m.
Spain’s central bank governor, Luis Maria Linde, didn’t attend the ECB council meeting today due to an appearance before a parliamentary budget committee. Separately, the Bank of England held its bond-purchase target at 375 billion pounds ($603 billion) and kept its key rate at 0.5 percent.
While Spain seeks the lightest possible terms from creditor governments and the ECB as a reward for austerity measures already implemented, it’s unlikely that Draghi will agree to no-strings-attached bond purchases, said Laurent Fransolet, head of interest-rate strategy at Barclays Plc in London.