Solbes claims ECB interest rate cut possible

11th September 2007, Comments 0 comments

11 September 2007, MADRID -(AFP) - The European Central Bank may be nearing the end of a cycle of interest rate hikes and it may even begin lowering rates in the 13-nation euro zone, Spain's finance minister said Monday.

11 September 2007

MADRID -(AFP) - The European Central Bank may be nearing the end of a cycle of interest rate hikes and it may even begin lowering rates in the 13-nation euro zone, Spain's finance minister said Monday.

"We are almost at the point where rates will stabilise...and in fact may even begin to come down," Pedro Solbes told television station Antena 3.

The ECB, which sets monetary policy for a bloc of 300 million people which accounts for some 15 percent of the world's gross domestic product, left its main interest rate unchanged at 4.0 percent at its monthly meeting last week amid continuing global credit market volatility.

The bank's decision came after market turbulence in August upset a previously signalled rate hike for the 13-nation eurozone.

Many economists now expect interest rates to remain at their present level until at least early 2008, given that a crisis in the US market for high-risk home loans might not be resolved quickly and that it would take time to assess the damage it had done.

[Copyright AFP with Expatica]

Subject: Spanish news

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