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U.S. Fed sticks to current monetary easing


09:00, March 21, 2013

WASHINGTON, March 20 (Xinhua) -- The U.S. Federal Reserve on Wednesday announced that it will keep buying assets at the current pace of 85 billion dollars a month to bolster economic growth and job creation.

U.S. economic growth expanded at a "moderate" pace following a pause late last year. Labor market conditions have shown signs of improvement in recent months but the unemployment rate remains high, the Fed said in a statement after wrapping up its two-day policy meeting of the Federal Open Market Committee (FOMC), the Fed's powerful interest rate setting panel.

To support a stronger economic recovery, the FOMC decided to continue purchasing additional agency mortgage-backed securities ( MBS) at a pace of 40 billion dollars per month and longer-term Treasury securities at a pace of 45 billion dollars per month, noted the statement.

These steps will provide "meaningful" support to U.S. economic growth and job creation. Against the background of the high unemployment rate and tamed inflation pressure, the central bank will continue to use monetary easing policy to boost economic growth, U.S. Federal Reserve Chairman Ben Bernanke said at a press conference after the meeting.

The Fed also decided to keep the target range for the federal funds rate at zero to 0.25 percent. The U.S. central bank has kept its federal funds rate at this historically low range since the end of 2008 to keep short-term borrowing cost low.

Fed's top policymakers on Wednesday lowered their projection of U.S. economic growth rate this year. They forecast U.S. economy to grow between 2.3 percent and 2.8 percent this year, slightly down from the range between 2.3 percent and 3.0 percent given in December.

U.S. economic growth rate was upwardly revised to an annual rate of 0.1 percent in the fourth quarter of 2012 from the previous estimate of a 0.1-percent decline. The nation's unemployment rate dropped to a four-year low of 7.7 percent in February, U.S. government figures showed.

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