ECB keeps eurozone interest rates at record low 1%

02 December 2010 13:45  [Source: ICIS news]

LONDON (ICIS)--The European Central Bank (ECB) kept interest rates at the record low of 1% for the 19th consecutive month on Thursday, as the eurozone struggles with debt problems.

The Frankfurt-based central bank’s president, Jean-Claude Trichet, will later on Thursday make an announcement on whether the ECB will take more action to stop the spread of the debt crisis in the 16-member eurozone.

These measures could include a temporary extension of the ECB’s provision of unlimited liquidity for banks and a ramp-up of its bond purchases.

Investors have been dumping Irish, Greek, Portuguese, Spanish and Belgian assets after the EU-led rescue package for Ireland failed to convince the markets that policy makers will be able to contain the crisis.

The ECB cut its key rate several times from the October 2008 level of 4.25% as it tried to take Europe's economy out of deep recession. The interest rate has remained at 1% since May 2009.

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By: Hilde Ovrebekk
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