Brussels, 01/08/2002 (Agence Europe) - At the teleconference meeting, organised by the European Central Bank (ECB), the Governing Council decided that the minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 3.25%, 4.25% and 2.25% respectively. The ECB was not able to justify its decision, which was not followed by the usual press conference. The next ECB decision on interest rates will be on 12 September.
The announcement was largely expected by economists, given the rise in the Euro, which had helped it contain price pressures, the consequences of the recent stock exchange tempests on business confidence and consumers, as well as uncertainties weighing down on the strength of the economic recovery. The ECB, therefore, didn't want to run the risk of suffocating tenuous economic growth by hiking up the cost of loans. Inflation has overall remained under control, despite some signs of tension and rose slightly in July by 1.9% compared to last year (according to an initial estimate published yesterday in Eurostat). The ECB is expected to wait to the end of the year before raising borrowing rates, so that the recovery remains well on course. Certain analysts are not ruling out the possibility of the ECB raising rates soon, if the economic conjuncture worsens.