No surprise from Central Bank Europe which, as widely expected, has Current levels of rates confirmed of interesttaking a break in the process of adjusting the cost of money. A decision that also responds to the high degree of uncertainty which characterizes or economic scenario, in view of the evolution of negotiations on duties and possible repercussions on world trade.
The decision of the board
The Board of Directors has decided today of keep the three interest rates unchanged reference of the ECB confirming
- the one on deposits at the Central Bank to 2%
- the one on the main refinancing operations at 2.15%
- The one on the marginal refinancing operations at 2.40%.
The progressive also confirmed Reduction of quantitative Easing measures: The Purchase Purchase Plan (Paa) and the Pandemic Plan (PEPP) are reducing to a measured and predictable rhythm, given that the Eurosystem no longer reinves the capital repaid on the expiring titles.
Inflation in line with target
The decisions were made by the Board of Directors considering that Inflation is substantially aligned with the ECB target. Inflation – underlines – is currently equal to our 2% objective in the medium term. The new information is substantially in line with the previous evaluation of the Council about the inflation prospects. The internal pressure on prices continued to attenuate themselves, in the face of a slowdown of wages.
The Board of Directors – reads the Statement – is determined to ensure that inflation stabilize on the 2% goal in the medium term. To define the adequate monetary policy orientation, the Board of Directors will follow an approach led by the data on the basis of which the decisions are adopted from time to time at each meeting. In particular, the decisions of the Board of Directors on interest rates will be based on the evaluation of the prospects of inflation and the risks associated with them, considering the new economic and financial data, as well as the dynamics of the basic inflation and the intensity of the transmission of monetary policy, without binding a particular path of the rates.
Highly uncertain economy situation
Thanks also to the previous reductions in rates, the economy has shown overall good holding capacity in a difficult world context. At the same time- it is underlined- the Panorama remains exceptionally uncertainabove all because of commercial disputes.
For this the ECB board it is said
“ready to adapt all its tools As part of its mandate to ensure that inflation stabilizes on the 2% objective in the medium term and to preserve the orderly functioning of the monetary policy transmission mechanism. In addition, the tool for the protection of the transmission mechanism of monetary policy can be used to contrast unjustified, disordered market dynamics that seriously jeopardize the transmission of monetary policy in all the countries of the euro area, thus allowing the Board of Directors to fulfill its mandate of price stability more effectively “.
