The European Central Bank kept interest rates unchanged at record lows on Thursday, with President Mario Draghi now likely to face heavy questioning on Greece. The euro zone's central bank, still aiming to counter deflation, maintained its asset purchase program at 60 billion euros-a-month ($66 billion). The focus will now be firmly fixed on the ECB's emergency lending to Greek banks, with reports now suggesting the funding will not be increased before Friday. Draghi will host the usual press conference at the ECB headquarters in Frankfurt at 1:30 p.m London time, which follows the Governing Council's monthly announcement on interest rates. "Greece seems bound to dominate Draghi's press conference when the latest ECB monetary policy meeting concludes this afternoon," head of economic research at Daiwa Capital Markets Europe, Chris Scicluna said. The ECB has helped out the Greek banking industry through Emergency Liquidity Assistance (ELA): a series of loans given to Greek lenders to help with their solvency. The ECB dishes out these loans, but they actually come from the central banks of each individual euro zone country. The ECB has been maintaining its ELA cap to Greece at 89 billion euros. However, last week it decided to increase the amount of collateral that Greece needed for these loans -- a move seen by some as deeply political at a time when Greece was still deciding on whether to accept creditors' tough austerity terms. Read MoreGreece approves tough austerity: What next? Draghi will no doubt have to justify this move in front of the cameras, as well address any planned increases in cash to Greece, after the debt-stricken country voted in the new bailout terms. The euro slipped to a six-week low against the dollar on Thursday ahead of the ECB's decision after the Greek parliament approved its bailout plan, falling 0.5 percent to trade around $1.088. The dollar rallied after hawkish comments from the Federal Reserve on Wednesday put a September interest-rate rise back on the table. European equities also traded sharply higher after Prime Minister Alexis Tsipras' reform plan was pushed through. In the early hours of Thursday morning, the austerity bill that will pave the way for financial aid worth 86 billion euros ($94 billion) was approved with 229 votes in the 300-seat chamber. There were 64 votes against it and six abstentions. "Last night's parliamentary vote might well persuade the Governing Council to increase its ELA to the Greek banks," Scicluna said. "While Draghi will take some satisfaction from the measured response of euro area financial markets to the Greek crisis and recent economic data and surveys, which remain consistent with steady economic recovery and improved credit conditions in most member states, we would expect him to maintain a dovish tone, and emphasize the importance that the ECB complete its asset purchase program in full, at least through to September 2016," he added.

Source