ECB maintains rate at 0.75%

FRANKFURT/LONDON: The European Central Bank ( ECB) kept interest rates on hold as improving economic sentiment underpinned expectations of a gradual recovery this year.

Policy makers meeting in Frankfurt on Thursday left the benchmark rate at a record low of 0.75%. The deposit and marginal lending rates were also unchanged at 0% and 1.5%, respectively. ECB President Mario Draghi will hold a press conference to explain the decision.

Improving confidence indicators have eased pressure on the ECB to reduce rates from a record low, a move fraught with the unknown consequences of possibly pushing the deposit rate below zero.

A pledge last year to buy as many government bonds as it takes to stabilize the single currency, buttressed by political progress to bring euro-zone economies closer together, has eased fears the bloc would splinter.

Since the ECB's policy meeting in December, the euro-area composite purchasing managers' index, Germany's Ifo business confidence gauge and France's INSEE measure all showed improvement for a second month.