The rates at 1%, is this the end of the policy of the ECB cuts?
| Date: May 7, 2009 | Source: Europa Press |
| Category: Economy | |
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Loading ... The Governing Council of the European Central Bank (ECB) decided today to cut interest rates in the euro zone by a quarter percentage point to 1%, which is the lowest in the history of the institution and could involve an end to the easing of monetary policy, according to experts consulted by Europa Press.
In this sense, analysts at Citigroup, Bank of America and Morgan Stanley agree that cutting forecast today marks the end of the series of runs made by the institution since last October 8, which have brought the rate from 4 , 25% to 1% today, and that from now on, the ECB will use unconventional measures to combat the recession.
Repeatedly, the president of the Bundesbank and a member of the governing council of the European Central Bank (ECB), Axel Weber, warned that placing the funds rate in the eurozone to below 1% would imply a risk of causing a paralysis of the market Private interbank.
On the other hand, the European Commission forecast that the economy of the euro area in 2009 recorded a decline of 4%, while in 2010 the GDP will fall 0.1%.
From the point of view of prices, the euro zone inflation in April remained at 0.6%, its lowest level since 1997 and unchanged from the previous month. Also, the unemployment rate in the euro area reached 8.9% in March compared to 7.2% a year and two points more than in February.
