The European Central Bank kept its benchmark interest rate on hold Thursday and raised its growth forecasts as it acknowledged that the recovery is strengthening in the 18 countries that use the euro. After the decision to keep the key rate at a record low of 0.25 percent, ECB President Mario Draghi said the bank's latest projections foresee economic growth of 1.2 percent this year. That is up slightly from the 1.1 percent estimate made in December. According to AP, investors seemed to take the forecasts as an indication the ECB is less likely to loosen monetary policy further in coming months. The euro rose sharply, gaining a cent against the dollar to trade around $1.3850. Yet Draghi warned that the economy still had so much slack to take up that the bank's existing stimulus of low rates and easy credit to banks "will continue even though we see improvements in the economy." The eurozone grew 0.3 percent in the fourth quarter but unemployment remains high at 12 percent.
