ECB keeps rates, guidance unchanged

FRANKFURT (Reuters) - The European Central Bank left interest rates unchanged as expected on Thursday and maintained the key parameters of its 1.74 trillion euro ($1.95 trillion) asset buying scheme as it tries to lift growth and inflation.

The decision to keep policy unchanged was expected by nearly all 71 analysts polled by Reuters, even as the vast majority of them still expect the ECB to extend the bond buying programme when the Governing Council next meets in December.

Facing high unemployment, weak growth and ultra low inflation, the ECB has provided extraordinary stimulus in recent years, cutting interest rates deep into negative territory and pushing the cost of credit to all-time lows, hoping to jump start growth.

Although inflation reached a two-year high of 0.4 percent in September and will continue rising in the coming months, it will not hit the ECB's close to 2 percent target until late 2018 or early 2019, according to the bank's forecasts.

Repeating its forward guidance, the ECB added that it continues to expect its key interest rates to remain at present or lower levels for an extended period of time and well past the horizon of the net asset purchases.

It also said that its 80 billion euro per month asset purchase programme is intended to run until the end of March 2017, or beyond if necessary, and until the bank sees a sustained adjustment in the path of inflation consistent with its inflation aim.

At Thursday's meeting, the ECB kept its rate on bank overnight deposits, which is currently its primary interest rate tool, at -0.40 percent.

The main refinancing rate, which determines the cost of credit in the economy was unchanged at 0.00 percent while the rate on the marginal lending facility -- or emergency overnight borrowing rate for banks -- remains at 0.25 percent.

Markets now turn their attention to ECB President Mario Draghi's 1230 GMT news conference, where he is expected to provide hints about the future of the asset purchases, likely to be decided in December.

(Reporting by Balazs Koranyi Editing by Jeremy Gaunt.)