International business: Central Banks in Europe Hold Interest Rates

INTERNATIONAL BUSINESS
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(February 08, 2012)
International Business
The article covered in this paper is “Central Banks in Europe Hold Interest Rates” Jack Ewing and Julia Werdigier. It focuses on the decision of the Central Banks in Europe to retain the interest rates as they are. This was to cushion the economy from further detrimental effects and increase growth in the euro zone. Most banks in the euro region such as the Bank of England also maintained the same interest rates though there were expanded assets purchasing programs. The region is expected to grow through such measures and though there are negative stories such as the Greece issue; there are hopes of a turnaround from the recession seen in 2011. This move is expected to increase credit to borrowers and also boost confidence in investors that there will be no credit crunch in the region. The move is also aimed to tame the runaway inflation and make sure that product remains accessible to the consumers.
The article teaches a lot on the need to regulate interest rates in every economy since it can make or break the regional progress. It is always important to keep interest rates at a low level as it increases flow of finances in the economy and foster growth and development. Low interests’ rates will also increase investments which are key to the growth of any economy especially an economic region or block. Interest rates also cushion the purchasers and consumers since it lowers inflation and makes basic commodities such as food and energy available to all. The idea to also increase asset purchasing gives confi...