Europe keeps interest rates steady

The European Central Bank will leave key ECB interest rates unchanged in light of a favorable medium-term outlook for economic activity in the region. The ECB’s Governing Council decided at its meeting in Vienna that the minimum-bid rate on the main refinancing operations will remain at 4%; the interest rates on the marginal lending facility will remain at 5% and the interest rates on the deposit facility will remain at 3%. Considering the market volatility of recent weeks, the ECB will keep close tabs on any developments in the economy to ensure that risks to price stability over the coming term do not materialize, said ECB president Jean-Claude Trichet. While the ECB will remain cautiously optimistic, current forecasts for 2008 maintain real gross domestic product growth and expect healthy global economic activity, which will provide ongoing support to euro-area exports and investment, Mr. Trichet said.