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ECB's Trichet signals interest rate cut

ECB's Trichet signals interest rate cut

European Central Bank president Jean-Claude Trichet said Monday a cut in interest rates next month is "a possibility" because of lower inflationary pressure.
Trichet said this diminished pressure stems from lower prices for commodities like oil and a substantial weakening in demand.
On Oct. 8, the ECB joined the U.S. Fed and other central banks in cutting its key rate a half-point to combat the world financial crisis.
Trichet said an interest rate cut from the current 3.75 percent in November "is not a certainty. It is a possibility."
The ECB cut rates in October because it felt "upside risks to price stability had diminished," Trichet said
He added: "All our decisions are inspired by this fundamental primary objective: price stability. Any new monetary policy stance that we could decide on at our next regular monetary policy meeting must continue to allow us to tell our 320 million fellow citizens, 'you can be confident.'"
Trichet spoke Monday at a luncheon in Madrid for business leaders.
On the euro zone's future, he said prospects for economic growth "do not offer a completely reassuring picture."
Trichet said the global crisis marked "a period of intense turbulences which correspond to a very significant market correction at a global level."
He also avoided endorsing Spain's drive to be invited to next month's summit in Washington on the crisis. Spain says its economic might warrants it a voice at the meeting, but it has still be left off the list of countries invited.
Trichet said Spain is without a doubt part of global discussions on the economy but "it is up to those who are organizing this summit" to say who takes part in the Washington forum.
(dw)