Paris, 19/10/2000 (Agence Europe) - The Board of Governors of the European Central Bank, gathered this Thursday in Paris, in the presence of the President of the Eurogroup Laurent Fabius and Commissioner Pedro Solbes decided to maintain rates unchanged. Thus, the minimum submission rate applied to refinancing operations remains set a 4.75%, while the interest rate for the marginal loan facility and the deposit facility remain unchanged, at respectively 5.75% and 3.75%.
After this decision, the Euro remained stable, at USD 0.8433, while this week it once again fell, after an interview on Monday with the "Times" in which the ECB President Wim Duisenberg, to the question of knowing if intervention in the currency markets was probable in this period of tension in the Middle East, answered: "I would not think so". This Thursday, in his press conference in Paris, Mr Duisenberg answered "no" to the journalists, who wanted to know if, following the mistake, he had been advised to resign. "I drew my conclusions and I accepts the advice I was given", he added, when indicating that he would continue to "communicate in the future", through speeches, articles, in the ECB monthly bulletin and through "new interviews". The weapon of intervention in the currency markets "remains in out tool box", he asserted. As for the Governor of the Bank of France, Jean-Claude Trichet, he told the press that the Board of Governors was "warmly united" behind its President.
Before the press, Wim Duisenberg, added that the recent development in energy prices have had a significant effect on rates of inflation (2.8% in September compared to 2.3% in August) and that "the latest development confirm this message on which we have insisted on 5 October", namely that monetary policy must ensure continuity to maintain price stability". He also wanted, "beyond the comments concerning the latest development", make an assessment of the twenty two first months of the Monetary Union, which according to him "have been a success". In fact, he underlined that the growth in true GNP exceeded 3.5% during the last four quarters, and that employment progresses while unemployment fells "noticeably", while admitting that "the external value of the Euro significantly contrasts with this favourably situation". "In the framework of his mandate and in accordance with the future strategy, the Board of Governors will ensure that price stability be maintained in the medium-term (..) during the time to come, appropriate and energetic measures must be taken in the face of a certain number of challenges (…) Monetary policy will ensure that the risks resulting from price development for imports to not lead to more long lasting inflationary trends", he concluded.