The European Central Bank keeps rates at 1 percent

FRÁNCFORT (Reuters) - The European Central Bank on Thursday kept the minimum bid rate for refinancing auction at 1 per cent for the tenth consecutive month, as planned, and took further steps to remove the extraordinary measures taken during the global crisis, but still provides a fragile economic recovery.

The bank also left unchanged its deposit rate to 0.25 percent and the marginal at 1.75 percent.

The ECB will carry out regular offers three-month loans to banks from April, a sign that he is more comfortable with the state of the financial system and a new step towards the gradual withdrawal of billions of euros which injected into the banking system during the worst time of international crisis in 2008.

At the same time, the ECB said banks would continue to provide unlimited amounts in its weekly operations in the second quarter, also in line with what the market expected.

On average, analysts expect a rate hike in the fourth quarter.

Along with its monthly meeting, the ECB announced new economic estimates, which showed little change from those published in December.

The ECB staff projected that real GDP will rise between 0.4 percent and 1.2 percent this year versus an earlier forecast of between 0.1 percent and 1.5 percent.

By 2011, the ECB expects growth of between 0.5 percent and 2.5 percent above the previous estimate of 0,2-2,2 percent.

"The economic recovery in the euro area is ongoing, although it is likely to remain uneven," Trichet said at a news conference.

"Overall, the governing council expects the euro area economy to grow at a moderate pace in 2010, in an environment marked by persistent uncertainty," he said.

Analysts warned about the risks of overly rapid withdrawal of incentives.

"While there is a clear desire to return to normal and regain control of the instrument of interest rates, the tensions surrounding Greece and banks generally inject some concern that a too-rapid departure could be dangerous," said Erik Nielsen, economist at Goldman Sachs in a report.

Shortly before the decision of the ECB, the Bank of England also left its interest rates steady at historic lows of 0.5 percent.

The 87 economists surveyed by Reuters had expected an interest in maintaining current levels.