Global Interest Rates Drop, US Dollar Rises

Thursday, 5 Mar 2009 | 10:40 AM ET

The Bank of England and European Central Bank slashed their interest rates to record lows today in an effort to bolster access to credit and contain the impact of a deepening recession.

The Bank of England’s Monetary Policy Committee decided to slash its interest rate by 50 basis points to 0.5%, sending its key rate to its lowest level on record. The BoE also announced that it will begin a "quantitaive easing" program.

  • Bank of Engand Cuts Rates, to Buy Govt Bonds

The ECB lowered its interest rate by 50 basis points to 1.5%, marking the fifth rate cut in the past six months.

Analysts widely expected a move by the European Central Bank, as weak economic data in the 15-nation eurozone along with easing inflation has given the ECB room for further rate cuts.

  • ECB Cuts Rate to 1.5%, Mulls New Measures

The dollar index , which tracks the greenback’s standing against a basket of currencies, has gained 9.68% in the past three months as risk aversion amid the global financial crisis has boosted the US dollar low-yielding status as a "safe-haven" currency. The dollar index is now trading at levels not seen since early 2006.

Since early December, the US dollar has appreciated about 4% versus the pound sterling , 10% against the euro , and 9% against the Japanese yen .

Here is a look at where some of the world’s interest rates stand:

Click here for currencies rates