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Monday 21st of September 2009
March 23, 2009    

European central bank reveals more interest rate cuts likely

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by Peter Charalambous
 European central bank reveals more interest rate cuts likely

Jean-Claude Trichet the president of the European Central Bank has said in an interview to an American newspaper that a stimulus spending was not what the euro zone needed.

This has heightened speculation that the benchmark rate in the 16 member states will be cut further from the 1.5 percent rate.

Trichet said that the primary concern was the restoration of the financial sector and until this has been returned to full health then little will work or will remain stable in the current climate.

Europe will enter further discussions in regard to need for further stimulus packages at the Group of 20 summit in London on April 2nd.

According to the ECB president the bank is not in a position to have to increase spending in order to avert a global financial meltdown as full support is being given to the European way of doing things by acting on measures that have already been committed to.

As a result this naturally brings the focus to interest rates and the bank will consider lowering rates having already taken 3 percent off for the 4.5 percent rate in 2008.

If a decision were to be taken then this would bring European interest rates to a new record for the bank’s 10 year history.

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