ECB holds key interest rates unchanged at historic low

15:20, February 04, 2011      

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The European Central Bank (ECB) left its benchmark interest rate untouched at a historic low of 1 percent Thursday, as market saw mounting inflation pressure in the eurozone economy.

The ECB also kept the marginal lending rate and the deposit rate unchanged at 1.75 percent and 0.25 percent separately.

In December, the eurozone' s annual inflation reached 2.2 percent, above the bank' s target of close to but below 2.0 percent. The prices seemed to keep on rising at the beginning of 2011. Experts forecast that the inflation rate would climb to 2.4 percent in January.

Markets are waiting to see how long the ECB will hold its low-rate policy that has not changed since May 2009 and might trigger further rise in prices.

During last monthly meeting on Jan. 13, ECB President Jean-Claude Trichet told reporter that they have noticed "short-term upward pressure on overall inflation, mainly owing to energy prices", but it has affected the bank's assessment that current rate is appropriate for keeping price stability.

All eyes now turned to the news conference later Thursday, in which Trichet is due to explain the bank's monetary policy and comment on current situation and future direction of the eurozone economy.

Source: Xinhua
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