ECB keeps key rate unchanged at 0.5%

The 23-member governing council of European Central Bank has left its benchmark interest rate unaltered at a record low of 0.5%. The council said that the slowly recuperating eurozone economy didn’t need a further stimulus.

The 17 European Union member countries that used the euro came out of recession in the second quarter when the economy posted 0.3% growth from the quarter before, discontinuing a series of 18 months of falling output.

About European Central Bank

Established in 1998 through Treaty of Amsterdam in 1998. It is one of the seven institutions of the European Union (EU) listed in the Treaty on European Union(TEU).

Headquarters: Frankfurt, Germany.

Current President: Mario Draghi

It is central bank for the euro and administers the monetary policy of the 17 EU member states which constitute the Eurozone. However, capital stock of the bank is owned by the central banks of all 28 EU member states.

Primary Objective: To maintain price stability within the Eurozone. It has this single ill-defined primary objective, with other objectives subordinated to it.

Basic Tasks of ECB:

• To define and implement the monetary policy for the Eurozone
• To conduct foreign exchange operations
• To take care of the foreign reserves of the European System of Central Banks
• To promote smooth operation of the financial market infrastructure under the TARGET2 payments system and the technical platform (currently being developed) for settlement of securities in Europe (TARGET2 Securities).
• Exclusive right to authorize the issuance of euro banknotes.

Month: Current Affairs - September, 2013