The European Central Bank left interest rates unchanged on Thursday, holding them at record lows as it continues a money-printing scheme to lift the economy.

The decision to leave the cost of borrowing unchanged was widely expected after the ECB cut rates to rock-bottom levels last September and said they had hit “the lower bound”.

At Thursday’s meeting, the ECB left its main refinancing rate, which determines the cost of credit in the economy, at 0.05 per cent.

It also kept the rate on bank overnight deposits at -0.20 per cent, which means banks pay to park funds at the central bank, and held its marginal lending facility - or emergency overnight borrowing rate for banks - at 0.30 per cent.

The ECB’s €60 billion per month asset purchase programme will continue until September 2016 or until inflation rises to its target, ECB president Mario Draghi said on Thursday.

“The asset purchase programmes continue to proceed smoothly,” Mr Draghi told a news conference after the bank has left interest rates unchanged.

“If any factors were to lead to an unwarranted tightening of monetary policy, or if the outlook for price stability were to materially change, the (ECB) ... would respond to such a situation by using all the instruments available within its mandate,” he said.

The ECB rolled out quantitative easing earlier this year to get the currency block out of deflation and its last forecast in June indicated that inflation would rise to the target of just under 2 per cent by 2017.

Reuters