FXstreet.com (Barcelona) - The ECB has cut its main interest rate by 50 basis points to 2.0%, on the light of a sharp decline on Inflation and in anticipation of further economic slowdown as ECB's president Jean Claude Trichet affirmed at his first press conference at his first press conference after the release of the monetary policy decision.
ECB president has pointed out the moderation on inflationary pressures, which, according to his criteria, will continue diminishing in the next months, to pick up in the second half of 2009.
The decision has been taken unanimously, according to Trichet, on advance of further weakening on economic activity. According to Trichetthe worst moments of the economic crisis might still be ahead, with economic activity weakening further towards the year end, while domestic demand will continue sluggish for a protracted period of time.
Trichet has affirmed that the Eurozone is experiencing a significant slowdown, with economic uncertainty at exceptionally high levels. In this line, Trichet has called for government action to ensure trust in the financial system, for that matter, the ECB president has defended the need for close cooperation between regulators at global level.
As usual the ECB presidnt has affirmed the banks commitment to monitor all developments closely in order to guarantee financial stability, although he affirmed that February's policy meeting will not be important, the next important decision will be taken in March.