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ECB Increases Lending to Greece, Raising Hopes Banks Will Reopen Soon

The European Central Bank has increased its lending to Greece, raising hopes that banks may be able to open their doors after more than two weeks.
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The European Central Bank has increased its emergency lending to Greece, President Mario Draghi revealed Thursday, raising hopes that banks may be able to open their doors after more than two weeks of closures.

He said the bank would raise its funding to lenders in Greece by $978 million over one week. The move comes after the Greek parliament voted in favor of an austerity reform package in the early hours of Thursday morning, paving the way for a bailout program.

"We have today accommodated the Bank of Greece request, though scaled to one week. We want to see how the situation will evolve," Draghi said, speaking from the central bank's headquarters in Frankfurt, Germany.

The European Central Bank (ECB) has helped out the Greek banking industry through Emergency Liquidity Assistance — 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.

Related: What's Next for Greece?

Draghi was forced to fend off a heavy round of questioning on the Greek bailout situation and the emergency funding extended to Greek banks, as he noted that debt relief for the cash-strapped country is necessary but said that there was no decision to write down any of Greece's debt pile.

"There was no decision on haircuts, we have raised it before and we took no decision today," he said.

The euro zone's central bank also opted to keep interest rates unchanged at record lows in an effort to counter deflation. The euro dipped slightly as Draghi spoke, having fallen 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.

Related: 'Revolution': Greeks Are Unhappy with Debt Deal

European equities also traded sharply higher after Prime Minister Alexis Tsipras' reform plan was pushed through.

In the early hours of Thursday, the austerity bill that will pave the way for financial aid worth $94 billion was approved with 229 votes in the 300-seat chamber. There were 64 votes against it and six abstentions.

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