PTI

Fed, BoE, ECB keep low interest rates

Thu, Nov 5 09:41 PM

London, Nov 5 (PTI) Faced with fragile economic recovery, three major central banks --the US Federal Reserve, the Bank of England and the European Central Bank-- have retained their low interest rates to improve credit flow in the system. A day after the US Federal Reserve moved to continue with the near-zero rate regime, the Bank of England (BoE) and the European Central Bank (ECB) kept status quo in rates.

Both the Fed and BoE said economic recovery in their respective countries would be slow and availability of credit is likely to be limited. Refraining from tightening money supply, the British cental bank left the benchmark rate unchanged at 0.50 per cent for the eighth consecutive month.

On other hand, it would pump in another 25 billion pounds to boost recession-hit economy. The ECB retained the key rates while the region''s economy is slowly showing signs of revival.

It kept the rate for main refinancing operation at 1 per cent, marginal lending facility at 1.75 per cent and deposit facility at 0.25 per cent. Post-Lehman collpase September last year, central banks worldwide had lowered rates and injected billions of dollars into system to revive economies.

While the Fed cut rates to near zero, BoE and ECB too have reduced rates to extremely lower levels. The moves by apex banks would allay fears worldwide that soft monetary stance would be reversed, that spooked global stock markets on Tuesday.

Recently, the European Commission had said the 27-nation EU would climb out of recession this year but the recovery would be slow.

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