(MENAFN- AFP) The European Central Bank held its fire on any new policy measures on Thursday, snubbing calls for fresh action to ward off the spectre of deflation in the euro area.
As widely expected, the ECB held its key interest rates unchanged at its regular monthly policy meeting.
It said in a statement that it was holding its main "refinancing" rate steady at 0.05 percent, and its two other rates -- the marginal lending and the deposit rates -- at 0.30 percent and minus 0.20 percent, respectively.
ECB President Mario Draghi was scheduled to explain the reasoning behind the decisions at his monthly news conference.
But despite growing pressure for additional anti-deflation moves, Draghi is unlikely to announce any new measures, arguing instead that a recent raft of policy moves still need time to unfold, analysts said.
Earlier in Paris, the Organisation for Economic Cooperation and Development (OECD) urged the ECB to step up support for the eurozone economy that it sees as posing a major risk to slowing world growth.
"Given the very weak economy and the risk of deflation, the ECB should expand its monetary support beyond currently announced measures, building on the positive effects to date," the OECD said.
"This should include a commitment to sizeable asset purchases ('quantitative easing') until inflation is back on track," it said, adding that the purchases could include government bonds, which the ECB has so far shunned due to political sensitivities in Europe about the central bank underwriting government spending.
But ECB watchers said Draghi is unlikely to announce any quantitative easing just yet.
"We don't expect the ECB to announce any new measures. Draghi will most likely focus on the measures already taken, while keeping the door open for further stimulus," said Natixis economist Johannes Gareis.
"In the best case, he will give hints at what the ECB is willing to do next, if the outlook for inflation worsens further," the expert said.
- No rate cuts seen -
With interest rates already at record lows and unlikely to go down any further, the ECB has embarked upon a series of liquidity programmes to inject cash into the economy to try to kick-start stymied credit, seen as the main hurdle to a sustained recovery.
In addition to targeted long-term refinancing operations or TLTROs -- which make cheap liquidity available to banks on condition they lend it on to companies -- the ECB has launched a programme to buy covered bonds.
Furthermore, the ECB is launching purchases of asset-backed securities (ABS), or bundles of individual loans such as mortgages, car loans and credit-card debt sold on to investors, to allow banks to share the risk of default and free up funds to offer more lending.
Draghi has said the combined effect of these measures could boost the size of the bank's balance sheet by one trillion euros ($1.25 trillion).
Nevertheless, the effects of the measures have yet to fully unfold, because analysts believe some banks may have preferred to hold off until after the results of the ECB's most stringent-ever audit of lenders were published.
The results of the audit were announced last week, giving a large majority of banks a clean bill of health.
This week, media reports have speculated about serious disagreements on the ECB's policy-setting governing council and criticism of Draghi's leadership style.
Some newspapers have even suggested that either Draghi or Bundesbank president Jens Weidmann could resign over their disagreements about the issue.
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