The European Central Bank left interest rates unchanged even as a stronger currency threatens the euro area’s recovery from recession.
Policy makers meeting in Frankfurt today kept the benchmark rate at a record low of 0.75 percent, as forecast by all 60 economists in a Bloomberg News survey. President Mario Draghi holds a press conference at 2:30 p.m. to explain the decision.
While Draghi’s predecessor, Jean-Claude Trichet, was willing to intervene verbally to influence the euro, speaking of “brutal” shifts in currencies, Draghi has been circumspect so far.
“A significant shift is underway in global central banking,” said Paul Mortimer-Lee, global head of market economics at BNP Paribas SA in London. “There is a worldwide currency war and the ECB seems to be a central bank that is not targeting the real economy as much as the Fed, the Bank of Japan and the Bank of England,” he said. The ECB “risks being the loser.”