Thursday, May 5, 2011

European Central Bank Holds Rate Unchanged at 1.25%

The European Central Bank maintained the Main refinancing operations rate at 1.25% and the Marginal lending facility at 2.00% and Deposit facility at 0.50%.  The move marks a temporary pause in its path toward monetary policy normalization which commenced on the 8th of April with a 25bp increase.  The Bank said it continues "to see upward pressure on overall inflation, mainly owing to energy and commodity prices. [and]... that the underlying pace of monetary expansion is still moderate, monetary liquidity remains ample and may facilitate the accommodation of price pressures."  Euro Area annual inflation rose to 2.8% in April, up from 2.7% in March, and above the 2% inflation target.

www.CentralBankNews.info

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