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Berlin (pte032/04.05.2005/12:37) - Despite pressure from European politicians the European Central Bank, ECB, is expected to announce holding its key rates steady at the monthly policy meeting in Frankfurt later this week.
Economy experts are unanimously agreed that the governing council would maintain the current rate, the 'refi' - refinancing rate - which has been steady at 2.0 per cent since June 2003.
It has been suggested that borrowing costs in the eurozone would rise. However, due to disappointing economic data, this move has been gradually moved back.
Wolfgang Clement, German Economy Minister, criticised the ECB's stubbornness by saying, "Price developments are stable, so that monetary policy has room to react," as the German government was forced to downgrade growth forecasts for 2005.
Prime Minister Silvio Berlusconi of Italy said that focusing on inflation rather than growth, as is ECB's policy, was 'destructive' and was affecting competitiveness on the market.
Due to the euro's eight per cent rise against the dollar in the last year, eurozone products have become more expensive than imported goods from outside the European Union.
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