Thursday, April 19, 2018
 
 
News: Page (1) of 1 - 08/04/11 Email this story to a friend. email article Print this page (Article printing at MyDmn.com).print page facebook
ECB leaves key rate at 1.5 pct amid market turmoil
ECB's Trichet says bond purchase program has not been shelved; bank leaves rates unchanged
By The Associated Press

FRANKFURT, Germany (AP) ' European Central Bank head Jean-Claude Trichet isn't saying whether the bank is propping up Spanish and Italian bonds to quell debt market turmoil, but insisted that the bond-buying program has not been shelved.

Trichet said any moves would be made public at the regular weekly disclosure on Mondays.

"You will see what we do," he said Thursday after the bank kept its main interest rate unchanged at 1.5 percent.



As Trichet was speaking there was speculation in the markets that the European Central Bank was intervening to shore up Italian bond prices, which have taken a particular pounding over the past few weeks.

Recently, Italian bonds, as well as those of Spain, have seen their prices fall, driving up the interest yields that governments face to finance their debt. Rising yields drove Greece, Portugal and Ireland to seek bailout loans from the eurozone and the International Monetary Fund.

Eurozone leaders agreed a second bailout for Greece July 21 and gave their bailout fund the power to buy bonds in the secondary market. But the changes will not get through national parliaments until this fall, leading some observers to wonder whether the ECB would reactivate bond purchases after leaving them dormant for four months.

Trichet also said the bank would monitor inflation "very closely," repeating the bank's stance from last month. That phrasing is considered code for a possible rate hike in the months ahead.

Some analysts expect another rate hike this year, but others think it may be shelved because of a waning economic recovery and ongoing debt problems. Trichet offered some fodder for either point of view, saying that economic growth may slow in the second half but stressing that inflation risks "remain to the upside."

While inflation concerns argue for a hike, growth worries would push the bank in the other direction.

The bank also announced the extension of its previous short-term credit offerings to banks, and added a six-month offering of unlimited credit, measures aimed at supporting banks by making added ready money available if they want it.


Page: 1


 
 
 
 
 
 
 
 
 
 
 





Our Privacy Policy --- About The U.S. Daily News - Contact Us - Advertise With Us - Privacy Guidelines