The European Central Bank will keep a key interest rate unchanged. Despite moves by the Federal Reserve to apply downward pressure on lending rates to stimulate spending and expand employment, Europe's central bank views the current rate in the euro zone as appropriate.
The ECB left its benchmark refinancing rate at a record-low of one-percent. It appears to be staying on track to unwind its own post-crisis programs even though the unemployment rate across the 16 countries of the Euro zone stands at a high of 10.1 percent.
But while the US Federal Reserve is pumping more money into the economy partly to increase growth and decrease unemployment, the ECB seems to be pursuing the opposite path.
Jean-Claude Trichet, ECB President, said, "Based on its regular economic and monetary analysis, the governing council continues to view the current key ECB interest rates as appropriate. It therefore decided to leave them unchanged. Taking into account all the new information and analyses which have become available since our meeting on October 7 , 2010 we continue to expect price developments to remain moderate over the policy relevant medium-term horizon."
Trichet offered no clues to the future of its post-crisis lending measures.
He said the ECB's measures, such as providing unlimited liquidity to banks and buying government bonds, are of a transitory nature.
One important reason for this is that inflation—at 1.9 percent—is at its target and economic growth has outstripped much more gloomy predictions earlier this year when the Greek debt crisis was in full swing.
(Xinhua News Agency November 8, 2010)