ECB promises low interest rates

THE European Central Bank has promised to keep its interest rates at current record low levels for an "extended period".

ECB President Mario Draghi says there could even be a cut to support the ailing eurozone economy.

Seeking to calm worries about Portugal, where a political crisis sparked by austerity has rocked markets and driven up borrowing rates this week, Draghi assured that the country "is in safe hands".

The ECB's governing council voted to hold its key interest rate at an all-time low of 0.50 per cent for the third month in a row.

Draghi vowed that "monetary policy will remain accommodative for as long as necessary," in remarks to a press conference.

The ECB's decision-making governing council "expects the key ECB interest rates to remain at present or lower levels for an extended period of time," Draghi said.

"Our exit (from low interest rates) is very distant."

The comments pushed the euro down against the US dollar, but triggered a rally in stock prices all around Europe, since it was the first time that the ECB has ever given such forward guidance.

Draghi's comments came shortly after the Bank of England in London also hinted that it would not lift record-low borrowing costs in the short term.

The decision to issue such "unprecedented forward guidance" was "unanimous", the ECB chief added.

"We had an extensive discussion about a possible interest rate cut," he said.

"But after this extensive debate, we basically unanimously agreed about this forward guidance," Draghi said.

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