Thursday, May 7, 2009
The European Central Bank has cut interest rates in the Eurozone to a record low of 1%, from 1.25%. It is the seventh time the ECB has lowered its key rate since October 2008, when it stood at 4.25%.
Iceland's central cut rates from 15.5% to 13% in its third cut this year. Denmark cut rates from 2% to 1.65% and the Czech central bank cut rates from 1.75% to 1.5%.
Whereas the ECB has fewer tools available than the central banks of the Euro member states, but has reached agreement on a plan to pump about 60bn euros into the eurozone economy by buying up debt.
The ECB's UK and US counterparts have taken similar unconventional monetary policy measures to boost growth.
"We have not decided today that the new level of our policy rates was the lowest level," Mr Trichet said, but he added that rates were at an appropriate level for now. The ECB said it would lend banks unlimited funds for up to 12 months, up from six months.
The Bank of England's announcement that it would keep interest rates unchanged at 0.5%. The Bank of England also said it would pump an extra BP 50 bn into the UK economy via purchases of government and corporate debt, extending its planned spending to £125bn.