Frankfurt, 04/01/2001 (Agence Europe) - At its first session in 2001, which finally took the form of a teleconference, on Thursday 4 January, the Governing Council of the European Central Bank (ECB) decided to keep its main interest rates unchanged. Thus, the minimum bid rate on the main refinancing operations remains set at 4.75%, the marginal lending facility (ceiling) at 5.75% and the deposit facility (bottom rate) at 3.75%.
In addition, the Governing Council decided on an allotment amount of EUR 20 billion per operation for long-term refinancing operations to be conducted in 2001. An ECB press release stipulates that "this amount takes into consideration the expected liquidity needs of the euro area banking system in 2001 and the desire of the Eurosystem to continue to provide the bulk of refinancing of the financial sector through its main refinancing operations. The Governing Council may adjust the allotment amount in the course of the year in the event of unexpected developments in liquidity needs," the press release stipulates.
(On 3 January, the German economic institute DIW had asked the ECB, which it blames for slowing down German growth with its rises in the interest rates these past months, to provide a "signal" by lowering its rates).
Wednesday, the Monetary Committee of the Federal Reserve decided to reduce its main rate by half a point, to 6%, and its discount rate by a quarter of a point, to 5.7%. The Committee said that it had taken these measures (regarded as "bold" by President-elect George W. Bush) in the light of the slow-down in sales and production and in the context of a lowering of consumer confidence, while, moreover, observing that inflationary pressures remained contained.