ECB freezes interest rates

The European Central Bank has decided to freeze interest rates as underlying inflationary tendencies are studied and ECB president Wim Duisenberg decides what action to take.

The recent gains by the Euro against the USD has helped to stabilise the economic setting, since oil imports will be cheaper. Wim Duisenberg promptly explained that the increase in the exchange rate of the Euro will not affect exports from the EU (which will therefore become more expensive).

He declared that the ECB is studying the underlying inflationary trends and that measures will be taken should the need arise. In the meantime, however, interest rates will remain unaltered, yet the ECB is aware of the possibility of turbulent times ahead: “Without forgetting the recent decrease in inflation, the perspective for price stability remains less satisfactory than the forecast”, said Duisenberg.

The ECB objective is set at an inflation rate of 2% for 2002.

John ASHTEAD PRAVDA.Ru LONDON UNITED KINGDOM