ECB keeps main rates unchanged at 1 percent

08:11, July 09, 2010      

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The European Central Bank (ECB) decided to keep its benchmark interest rate at its historic low of 1.0 percent Thursday.

That decision came as investors waited for the outcomes of Europe-wide stress tests on banks.

The Frankfurt-based bank also kept interest rates on the marginal lending facility and the deposit facility at 1.75 percent and 0.25 percent respectively. The monetary policies, which have not been changed for the past 14 months, were in line with analysts’ expectations.

“Looking ahead, we expect the euro area economy to grow at a moderate and still uneven pace in an environment of high uncertainty,” Jean-Claude Trichet, chief of the ECB, said in a statement.

Trichet quoted data agency Eurostat’s figures, saying the euro area real GDP (gross domestic product) in the first quarter of 2010 slightly added 0.2 percent on a quarterly basis, suggesting a rebound in economic activity during the spring.

Trichet welcomed the upcoming publication of the “stress tests” on European banks, which cover 91 banks over the continent and seek to show a still “healthy” bank sector and restore confidence in the financial system. The test outcomes will be available July 23.

On the same day, the Bank of England announced that it will leave its base interest rate at a record low 0.5 percent for the 17th consecutive month.



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