ECB holds benchmark rates at 1%
The European Central Bank kept its main refinancing rate unchanged at a record low of one percent today, as expected by economists.
Markets are now turning their attention to President Jean-Claude Trichet's news conference this afternoon, when he will explain the decision and may sound a slightly more upbeat tone on prospects for a return to economic growth.
The ECB also kept its overnight deposit rate, which acts as a floor for money markets, at 0.25 percent and left its marginal lending rate at 1.75 percent.
All 75 economists in a Reuters poll expected the ECB to leave rates on hold.
The ECB has lowered its rates from 4.25 percent since October after the financial crisis wreaked havoc in the euro zone economy and inflation risks have subsided.
Euro zone consumer prices are falling and the economy is still shrinking, although some recent data has shown improvement.
Popular Stories
Update 3: Woman found dead in car,...
Updated: Woman dies in car crash
Carm Mifsud Bonnici resigns after...
Part of Dwejra 'Azure window' collapses
The end of the bar that ‘never closed’
Bundy does not know whether to...
Updated - Jason Micallef demands...
This WAS the night - Kurt makes it...
Petrol price up 6c
In Discussion
Updated - Jason Micallef demands...
Gozo tunnel could take 5-7 years to...
CABS remote controlled aircraft shot...
Carm Mifsud Bonnici resigns after...
Joseph Calleja condemns portrayal of...
Updated: Labour would give...
CABS drone shot down
Second group of migrants arrives
Adrian Vassallo in scathing...
3 Comments
Post comment
Please sign in or create your Account to post comments.
Mark Galea
Aug 6th 2009, 21:07
@JPace
It is useless in Malta to reduce interest rate further. There are many European based banks that are giving interest rates that match (or are slightly better) than those in Malta. When interest rate falls, in theory, people in large countries spend more on items PRODUCED IN THAT COUNTRY. Over here, due to the size of Malta, low interest rates fuel higher imports. Thre results are obvious if you reason this way.
Gianni Xuereb
Aug 6th 2009, 15:02
"Euro zone consumer prices are falling and the economy is still shrinking, although some recent data has shown improvement."
Malta is part of the Euro Zone but of course the "Only in Malta" rule applies here i.e. consumer prices are exploding!
JPace
Aug 6th 2009, 15:01
ECB reduced it to 1% to help Europe to recover from this recession, it has been months now. While MALTA as we do not have any recession (COME ON, people are loosing jobs!) our banks left it to 2.15%. WHY Malta is so special in this world, when things go down, ONLY in Malta Stay or even goes up???