ECB Leaves Rates on Hold as Expected
February 5, 2009
As expected, the European Central Bank (ECB) left rates on hold at 2.00%, citing that the level of uncertainty over the economy remains “exceptionally high”. ECB President Trichet stated that a zero interest rate policy is “not appropriate at this stage” and that inflation expectations are broadly balanced. His dovish comments more than signaled a 0.50% rate cut in March, though he made no pre-commitments. The Euro remained largely unchanged following the decision at 1.2800 against the US dollar.