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European Central Bank to lend funds until July 2013

Source : IANS
Last Updated: Fri, Dec 07, 2012 04:40 hrs

Frankfurt (Germany), Dec 7 (IANS/EFE) European Central Bank chief Mario Draghi said here Thursday that his institution will lend euro zone banks all the liquidity they require until at least July 2013.

He made the statement at a press conference after a meeting of the bank's Governing Council at ECB headquarters in Frankfurt.

The ECB chief also said those main refinancing operations, or MROs, will "remain in use for the euro system's special-term refinancing operations with a maturity of one maintenance period, which will continue to be conducted for as long as needed, and at least until the end of the second quarter of 2013".

The fixed rate in those operations will be the same as the MRO rate prevailing at the time, Draghi said.

The ECB Thursday left the euro zone's benchmark interest rate at a record-low 0.75 percent and most economists expect that rate to remain unchanged throughout 2013.

"The rates in the three-month longer-term refinancing operations, to be allotted until June 2013, will be fixed at the average rate of the MROs over the life of the respective longer-term refinancing operation," Draghi said.

Draghi defended two ECB offerings of three-year loans to banks, one at the end of 2011 and the other in February 2012, as necessary to avert a disaster in euro zone financial markets.

Those two operations provided many euro zone banks with sufficient liquidity to cover their needs for this year and purchase sovereign debt.

--IANS/EFE

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