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ECB keeps lending rates intact

June 6, 2012 at 12:17 PM

FRANKFURT, Germany, June 6 (UPI) -- The European Central Bank left overnight, bank-to-bank lending rates at 1 percent, the bank said Wednesday.

ECB President Mario Draghi repeated his assertion made a month earlier that inflation rates "are likely to stay above 2 percent" for the remainder of 2012.

"Consistent with this picture, the underlying pace of monetary expansion remains subdued," he said at a news conference.

The ECB in current projections, forecasts real gross domestic production growth between minus 0.5 percent and 0.3 percent for 2012 and between zero percent and 2 percent for 2013.

The new figures represent "a slight narrowing of the range for 2013," he said.

Draghi also gave a nod to the financial crisis that has European investors reeling and the euro sliding.

"Looking ahead, it is essential for banks to continue to strengthen their resilience further," he said. "The soundness of banks' balance sheets will be a key factor in facilitating both an appropriate provision of credit to the economy and the normalization of all funding channels."

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