(1888PressRelease)
November 16, 2008 - London, "The intensification and broadening of the financial market turmoil is likely to dampen global and Euro-area demand for a rather protracted period of time," said Jean-Claude Trichet, president of the European Central Bank, which formulates monetary policy for the 15 countries that share the Euro.
While the rate-setting committee of the ECB debated a 75 basis point cut, they decided on less. However, the ECB did not rule out the possibility of a further rate cut later in the year.
'I didn't exclude a further cut in December, depending on the data, depending on the information that will be gathered, depending on the (economic) projections that we could examine at the time, including of course the staff projections,' ECB President Jean-Claude Trichet said in an interview.
After Bank of England’s dramatic rate cut of one-and- a-half percentage point, markets were disappointed at the ECB’s conservative half a percentage point trim.
Even as the International Monetary Fund (IMF) forecast that the developed economies would shrink in 2009, for the first time since World War II, central banks in Europe cut rates to help spur growth.
Rapid appreciation of Swiss Franc forced the Swiss National Bank to cut rates by half a percent. Denmark followed with a similar cut to 5 percent while the Czech Republic lowered borrowing costs by three-quarters of a percentage point to 2.75 percent.
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