The European Central Bank met market expectations and held interest rates steady today in the hope that a struggling economy is on the mend.
The bank said it left the minimum bid rate at its weekly refinancing auctions unchanged at 2.75 per cent. The rates for the marginal lending and the deposit facilities also stayed flat at 3.75 per cent and 1.75 per cent, respectively.
The bank made no immediate further statement but a news conference with Mr Duisenberg is due at 1:30 p.m.
Economists had expected the ECB to stay put this week but many warned that grim economic news - a slump in manufacturing, which may worsen as the euro rises, weak retail sales and rising jobless - threaten recovery and would prompt the bank to lower rates further in the first half of this year.
The ECB lowered interest rates by 50 basis points at its previous meeting on December 5th, saying the sluggish pace of the euro zone economy meant inflation would not rear its head anytime soon, especially with the strong euro damping down price pressures.