ECB still holding rates at record low
7 August 2009
The European Central Bank kept interest rates on hold at a record low and hinted growth could return sooner than previously thought, although the euro zone economy will remain weak this year.
ECB President Jean-Claude Trichet said rates remained appropriate at the current level of 1.0 percent, adding that a fall in consumer prices in the euro zone's recession-bound economy was temporary. He also said the ECB had no intention of scaling back its plan to buy 60 billion euros in covered bonds -- one of its unconventional policies to revive growth by lowering long-term interest rates -- despite a fairly slow start. "In general, the overall mood is -- right or wrong -- a little bit better than it was before. Economic activity over the remainder of this year is likely to remain weak, although the pace of contraction is clearly slowing down," Trichet said.