At its most recent meeting the Council of the European Central Bank (ECB) decided to leave the key interest rate unchanged at 4.00%. Two other key interest rates were left unchanged at 5.00 and 3.00% respectively as well. By taking this step the ECB gave the stability of financial markets priority over measures counteracting inflationary trends.
Axel Nitschke, chief economist of the German Association of chambers of industry and commerce hopes that the ECB´s decision will ease credit conditions for small and medium-sized entities. »The ECB´s decision is the right monetary reaction to the strained situation on the financial markets. Given that the repercussions of the turbulences on the financial markets are still not foreseeable it is better not to change interest rates», said Mr. Nitschke.