Thursday March 12, 07:19 PM
Rate cuts not over yet: ECB's Trichet
 |
VIENNA (AFP) - The latest half-point cut in eurozone interest rates will not necessarily be the last, European Central Bank chief Jean-Claude Trichet said Thursday.
The ECB last week slashed its base rate to 1.50 percent, its lowest level in the bank's 10-year history.
"We said (then) that we did not decide ex ante that we were at the lowest level. I have nothing to add to that, I stick to that," Trichet told reporters.
Last week, the ECB and the Bank of England slashed borrowing costs in the face of the raging and relentless global economic crisis.
While the euro bank cut its rates to record lows, the Bank of England also cut its key rates to just 0.50 percent and announced plans to pump tens of billions of pounds in newly created money into Britain's economy in an unprecedented move aimed at boosting bank lending.
Asked whether the ECB was also discussing similar measures, Trichet replied: "No. We didn't discuss that."
Trichet called for "prudency and caution" when it came to making economic forecasts in the current global crisis.
"It is absolutely clear that the present year will be a year of recession in a large number of countries," he said, but noted the high level of uncertainty.
The ECB chief was in Vienna at the invitation of the Austrian central bank, OeNB, for a seminar with other central bank chiefs from the eurozone and the head of the Russian central bank, Sergey Ignatiev.
Ignatiev said that the ruble had "stabilised" since the beginning of February and that the Russian central bank hoped inflation in Russia, currently at 13.9 percent, would ease again.
"But we don't expect it to come down substantially," he said, declining to make any concrete forecast.
Ignatiev noted Russia's efforts to stabilise the ruble, saying that at one point the central bank bought one billion dollars.
But there had been no interventions "for more than a month now. The currency market is more balanced now. Our currency reserves remain roughly constant around equivalent of 380 billion dollars. We expect situation to remain like this in the coming months."
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
