ECB leaves key interest rate at 0.0 percent

interest is to continue to wait for a turnaround in the Eurozone. By the end of the year, the ECB wants to maintain the zero interest rate. In addition, the commercial banks to get new loans to stimulate the economy.

As expected, the European monetary policy remains in crisis mode. While the American Central Bank, the Fed has increased its policy rate gradually, remains in the Eurozone for the foreseeable future is Zero. At least until the end of the year, the ECB will leave its key interest rate unchanged, as the Central Bank announced on Thursday.

Previously had signalled the guardian of the currency, only up to at least the end of the summer, the interest not to interfere. The key phrase to supply the commercial banks with money since March, 2016 at a record low of 0.0 percent.

No Surprise

in fact, the rate of inflation at 1.9 percent in the Target range of the Central bankers objective of price stability. Also, the economic indicators point to a significant cooling of the European economy. The large research institutes have revised downward their forecasts of long ago.

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the decision by the ECB to leave the interest rates untouched Under these conditions, not surprisingly. Economists also suggests that only with low interest rates, escalating public Finance debt in the EU and the Euro zone hold together.

New loans for the banks

More: to brace himself against the impending downturn in the Euro zone, is to inject the commercial banks with new money in the Form of discounted long-term loans TLTRO called. The Euro-guard set on Thursday a new edition of this loan.

Of the money shots are likely to benefit, especially the Italian banks, as they have always 240 billion in bad loans on their books and, therefore, the urgent need to refinance. The new money injection should be have a term of two years and from September 2019 issued.

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Also of bonds in the portfolio

the first in A series of loans had decided the Central Bank in June 2014, a second in March 2016. Banks in Italy, Spain and France-to-grip handles reinforced.

The ECB wants to replace in addition to an interest in turn of for a longer period of time due to the end of bonds from its portfolio. The Euro-guard to remain a big player in the bond market. Your more than 2.6 trillion Euro engorged purchases of securities had set in December. The purchases were in the last few years your Central Instrument against a from their point of view to low Inflation.

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source: boerse.ard.de

More:

ECB sets bond purchases, 13.12.2018 US Central Bank raises key interest rate, 19.12.2018 Atlas |Germany |Frankfurt am Main

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