Level-headed ECB

At its first board meeting after the New Year, the European Central Bank (ECB) on Thursday once again refrained from changing its benchmark interest rate at a record low of 0.75 percent.

The Frankfurt-based guardian of the euro currency did not consider lowering the rate amid fledgling signs of a slight recovery in the 17-member eurozone, with inflation still above the 2 percent target.

Since the ECB's last meeting in December 2012, a series of key indicators had pointed to the euro area starting to turn the corner in its battle to get on top of its protracted debt crisis.

"Several indicators have broadly stabilized, albeit at low levels and financial market confidence has improved significantly," ECB President Mario Draghi told journalists.

Sovereign debt sells well

The reluctance of the bank to make any changes at this point was in line with what most analysts had expected. "This is not a surprise, given some of the comments from the board which did seem to play down the recent focus on interest rates," Nomura Economist Nick Matthews told Reuters news agency.

The ECB also refrained from pushing its 0 percent deposit rate into negative territory, fearing that might deal a hefty blow to money market funds which had already seen cash outflows over the past six months.

Prior to Thursday's board meeting, Italy and Spain completed their first bond auctions in the year successfully. While the yield on Spanish bonds with a 10-year maturity dropped below 5 percent for the first time since March 2012, the interest rate on Italy's one-year bills fell to its lowest level in two years.

hg/dr (dpa, Reuters)