FRANKFURT (Dow Jones) – The European Central Bank (ECB) keeps the Functioning of the euro money market, in the words of its President Jean-Claude Trichet continues to be disturbed and will therefore further Three-month fixed interest rate for refinancing operations with Vollzuteilung . Offer The money market functioning properly, and the strong Use of the ECB’s deposit facility by commercial banks was partly due to Trichet said on Thursday at the explanation the current interest rate decision. (Reuters photo:)
Earlier, the Governing Council announced as expected that the Main refinancing rate at its record low of 1.00% remains where he stands since June 2009. The other rates remained unchanged.
Trichet announced that, in the third quarter in each month a three-month long-term refinancing operation Vollzuteilung will give the fixed rate. The decision shall be in Council have been unanimous.
Regarding the on 12 May decided bond purchases (Securities Market Program – SMP) confirmed the ECB president, not this go accompanied by a change in monetary policy orientation. It is been decided, because important segments of the financial market no longer would have worked properly. The purchases were made with the proper working the monetary policy transmission, the resulting liquidity would neutralized. For more information, he would not give, "said the ECB president. For the sale of promissory notes Liquidity absorption, there are no immediate plans, according to Trichet.
In his introductory statement, the ECB president had noted that the extraordinary measures for increased Credit supply and the SMP would be contrary to the mandate of price stability ECB in line and are limited in time. On request, he confirmed However, the need for the bond purchases are being continued.
In his introductory remarks had Trichet before, the core elements of earlier statements on economic and Inflation estimates reaffirmed. He said the growth in the euro area should remain moderate in 2010. The ECB staff projections for the Economic growth in 2010 and 2011 developed in opposite directions. For 2010 now is a rise in GDP of 1,0% (previously: 0.8% expected), but also decreased the growth forecast for 2011 1.2 (1.5%).
expressed Regarding the inflation outlook, the ECB President relaxed again right. The price pressure in the euro area itself was very limited what the inflationary effects of higher commodity prices compensation. However, it should in the coming months a further no increase in inflation excluded, he said. The Staff projection for the rise of the harmonized consumer price index (HICP) were for 2010 and 2011 to 1.5% (previously 1.2%) and 1.6% (1.5%) raised.
By Hans-Bentzien, Dow Jones Newswires, +49 (0) 69 29 725 300
Hans.Bentzien @ dowjones.com
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