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The US Federal Reserve Bank has decided to keep interest rates at the record low of 0.25 per cent in order to support the “precarious economic recovery”.
The Federal Open Market Committee headed by chairman Ben Bernanke said there had been “some improvement in economic conditions, notably in the troubled labour market”, but indicated this was not enough to shift away from a massive stimulus effort.
Mr Bernanke said Americans could expect to see rates kept on hold for at least the first half of next year.
But while the official cash rate is expected to remain stable, a series of programs that were originally implemented to restore credit flows are likely to be allowed to expire in 2010.
These include efforts to guarantee commercial paper and asset-backed securities used for short term corporate funding.
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