Special Report: Global Financial
Crisis
BERLIN, March 5 (Xinhua) -- The European Central Bank
(ECB) on Thursday cut its key interest rate by a half percentage point to 1.50
percent to counter the economic slowdown in the euro zone.
Besides the key rate, the ECB also cut the interest
rate on the marginal lending facility by 0.50 percent to 2.50 percent and cut
the interest rate on the deposit facility by half to 0.50 percent.
"Euro area real GDP contracted markedly in the fourth
quarter of 2008, by 1.5 percent on a quarterly basis," ECB resident Jean-Claude
Trichet said at a press conference.
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European Central Bank (ECB) President
Jean-Claude Trichet speaks at a conference on financial regulation in
Paris Feb. 23, 2009. The European Central Bank (ECB) on Thursday cut its
key interest rate by a half percentage point to 1.50 percent to counter
the economic slowdown in the euro zone.(Xinhua/Reuters Photo)
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"Available data and survey indicators suggest that
economic activity in the euro area remained weak in early 2009." he said.
Trichet said inflation rates have decreased
significantly and are now expected to remain well below 2 percent over 2009 and
2010,while both global and domestic demands would still decline in 2009,as the
global slowdown becomes worse.
He stressed the importance of "an open market economy
with free competition," saying "it is of the utmost importance to avoid
protectionist measures."
"Refraining from protectionism will be key to
allowing the global economy to overcome the current crisis more rapidly," he
said.
This is the fifth time in six months for the ECB to
cut rates to counter economic slowdown, sending the ECB's key rate to a record
low.
Earlier in the day, the Bank of England (BOE),
Britain's central bank, also cut its key rate by 0.50 percentage point to 0.5
percent.
Trichet has been reported to be reluctant to follow
the lead of the Federal Reserve and the BOE, which have cut rates toward zero
and turned to other policy tools, fearing the broad axe may bring a future
crisis.
However at the press conference, Tricht said the
governing council of the ECB was still "open to any measure" considering the
uncertainty of future economic development.
Eurozone economy records worst
contraction in Q4
BRUSSELS,
March 5 (Xinhua) -- The eurozone economy contracted by 1.5 percent in the fourth
quarter of 2008, compared with the previous three months, the European Union
(EU)'s statistics bureau Eurostat said on Thursday, confirming a previous
estimate.
It was the deepest quarter-on-quarter contraction for the
euro zone since the single currency club came into being in 1999, marking the
third successive quarter of negative growth.
Bank of England cuts rates to record
low
LONDON, March 5 (Xinhua)
-- Bank of England, Britain's central bank, announced today it will cut interest
rates from 1 percent to 0.5 percent, a new record low, with the aim of reviving
the British economy.
The bank said it will adopt a "quantitative easing"
monetary policy to create 75 billion pounds (about 105 billion U.S. dollars) to
buy government bonds and company securities in an attempt to boost bank lending.
The bank expects it will take up to three months to carry out this programme.
Denmark cuts interest rate by 0.75
percentage points
STOCKHOLM,
March 5 (Xinhua) -- Denmark's central bank Nationalbank announced Thursday that
it had decided to cut its lending rate, according to reports reaching here from
Copenhagen.
"The lending rate and the rate of interest on certificates
are lowered by 0.75 percentage points to 2.25 percent. The discount rate and the
interest rate on the banks' current accounts with Nationalbank are lowered by
0.75 percent to 2.75 percent. The reduction will have effect as from March 6,
2009," said the bank in a statement.
