European Central Bank set to raise its interest ratesApril 7, 2011 - 10:58 AMT PanARMENIAN.Net - The European Central Bank is set on April 7 to raise its interest rates for the first time since July 2008 as concern over inflation trumps fears of collateral damage to weaker eurozone economies. "Even a small monetary tightening will affect the eurozone economy as a whole and the peripheral economies in particular," Capital Economics European economist Ben May said. Two questions analysts are asking is how big an increase the ECB could announce to bolster its inflation-fighting credentials, and whether it would be the first of a series that could extend into 2012, AFP reports. In March, ECB president Jean-Claude Trichet flagged a rate hike as inflation climbed well above the bank's target of just below 2.0 percent and suggested it might be on the order of 25 basis points to 1.25 percent. The benchmark rate for the 17-nation zone has been at a record low 1.0 percent since May 2009. With inflation at 2.6 percent and climbing, the ECB's governing council appears to have decided to act ahead of its peers the US Federal Reserve, the Bank of England or the Bank of Japan. But countries like Greece, Ireland and Portugal that are struggling with public deficit and debt crises will not welcome higher rates more appropriate for stronger eurozone economies such as France and Germany. After approving exceptional measures during the financial crisis, the ECB wants to move monetary policy back towards normal and is pressing governments to resolve chronic solvency issues. Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | Court in Azerbaijan extends former Karabakh leader’s arrest by 5 months The Binagadi District Court in Azerbaijan has granted the prosecutor’s petition to extend the arrest of Arkady Ghukasyan. Ucom General Director joins High-Tech Development Panel Discussion The discussion was titled "The Role of International Corporations and Investors as Catalysts for Development of High-Tech Ecosystem." Dozens detained as antigovernment protest continue in Armenia At least 63 people demanding Prime Minister Nikol Pashinyan’s resignation were detained on May 14 as they blocked streets in Yerevan. Family of Ilham Aliyev’s security chief owns vast property in UK As head of security for Azerbaijan’s president, Eyyubov is closely trusted by one of the world’s most authoritarian leaders. |