The European Central Bank on Thursday said its Governing Council left the key lending rate unchanged at a historic low of 1%. The decision was expected. The ECB withholds further rate reductions as growth remains crippled, while inflation rates are still below the bank’s set target rates of 2% in the 16-nation region.

The ECB has been holding rates at 1%, while government bonds were purchased worth 60 billion Euros to revive the economy and support liquidity, as interest rate reductions alone were not enough to end the worst economic recession since World War II.

Also, the central bank aided banks by providing further liquidity to spur lending and spending to boost growth levels; while the bank continues to lend to commercial financial institutions as a way to help restore the business cycle in the 16-nation region.

The ECB has already halted unlimited one-year, fixed-rate loans to commercial banks and has said it will halt six-month loans in April. The bank continues to provide unlimited three-month funds to banks at the 1% repo rate.

The European Commission expected that the euro zone will expand 0.8% this year and 1.2% next year, according to the last estimates provided by the ECB in December.

The euro showed little reaction to the announcement of the interest rate, changing hands at $1.3846 versus the dollar in recent action, a decline of 0.3%. Earlier, the euro hit a new seven-month low amid ongoing worries about debt problems in the periphery of the euro zone.

The ECB remains concerned that the banking system has not stabilized, which is why the focus from them now is how to exit stimulus measures without causing the euro zone to collapse. Conditions remain stressed and the recovery that is taking place are because of the temporarily measures.