BERLIN -- The
European Central Bank
held its main refinancing rate at 3.75% on Thursday as expected, signaling Europe's monetary authorities believe inflationary pressures remain checked.
The ECB last raised rates by a quarter of a percentage point a month ago as the eurozone's economic rebound quickened its pace and as the euro tested all-time lows against the U.S. dollar. Shortly after the central bankers opted to keep their powder dry Thursday, the euro dipped $0.0004 to $0.9028.
Although most observers expected the ECB to refrain from taking action, some thought the bank might choose to hike rates by a quarter point. Such a change in monetary policy could still come as soon as the next meeting of the bank's
two weeks from now, as the central bankers have recently begun to turn their hawkish rhetoric up a notch.
In the ECB's May monthly report released last week, the bank reiterated its concern over "ample" liquidity and the inflationary risks posed by the euro's weakness.
The ECB sets monetary policy for Germany, France, Italy, Spain, Portugal, the Netherlands, Belgium, Finland, Luxembourg, Ireland and Austria.