As expected, the
European Central Bank
left the euro area's interest rates unchanged Thursday. ECB President
and the rest of the bank's 17-member Governing Council left the benchmark rate, the equivalent of the fed funds target, at 2.5%.
It appears likely that rates won't change unless something happens to drastically alter the region's economic prospects or until the effects of the bank's April 8 rate cut are clearer.
In contrast to the
, which this week signaled it had adopted a bias toward tightening monetary policy, the ECB is still digesting April's larger-than-expected 50-basis-point easing. At the ECB's press conference on May 6, Duisenberg told
that in the wake of the cut, he wasn't leaning toward either a tighter or looser monetary policy.
In the ECB's monthly report for May, the bank said it still didn't see inflationary pressures from either the recent hikes in energy prices or robust credit growth in the euro countries. The central bank also berated member countries for not doing enough for fiscal consolidation or trimming budgetary deficits.
The ECB sets monetary policy for Germany, France, Italy, Spain, Portugal, the Netherlands, Belgium, Finland, Luxembourg, Ireland and Austria.