Frankfurt: European Central Bank president Mario Draghi reiterated that he’ll keep interest rates low as officials try to revive the region’s economy with a new round of emergency measures.

The key ECB interest rates will remain at present levels for an extended period of time, Draghi said at a press conference in Frankfurt after policy makers left borrowing costs unchanged.

Thursday’s meeting was the first after the ECB unveiled a range of measures last month to fight the threat of deflation in the euro area. The package includes long-term loans to banks under the condition they lend the money on to households and companies as well as preparatory work for an ECB asset-purchase programme.

Draghi’s press conference was overshadowed by a US jobs report that pained a picture of a brightening labour market in the world’s largest economy. The euro dropped as low as $1.3596 during the press conference, down from $1.3664 earlier in the day.

Today, the ECB left the main refinancing rate at a record low of 0.15%, as predicted by all 54 economists in a Bloomberg News survey. The deposit rate stayed at minus 0.1%.

Last month’s historic announcement left many questions unanswered and Draghi gave some details today on the new targeted-loan programme. He estimated that banks could take up as much as €1 trillion ($1.36 trillion) in the two initial tenders and a series of quarterly auctions.

I’m confident that banks will quickly understand that even though it’s complicated, it’s also quite attractive, he said.

Loan lifetime

At the same time, Draghi provided no precise definition of how much lending banks need to generate before they can keep the loans for the four-year life span of the program. Nor did he flesh out the ECB’s thinking about purchases of asset-backed securities as a means to get lending flowing again.

The ECB’s 24-member Governing Council is trying to stop inflation falling too low in an economy still struggling to recover from a debt crisis that at one point threatened to blow the euro apart. Inflation in the 18-nation bloc held at 0.5% in June at about a quarter of the ECB’s target of just under 2%. The rate has been below 1% every month since October.

We are strongly determined to safeguard the firm anchoring of inflation expectation over the medium term, Draghi said. He also repeated that the ECB stands ready to embark on broad-based asset purchases if necessary.

Draghi said that the ECB will next year move from a monthly cycle of announcing interest rates and will instead announce its decisions every six weeks. In addition, the ECB also plans to start publishing minutes in 2015, falling into line with the Federal Reserve and the Bank of Japan. BLOOMBERG

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