The European Central Bank held its first interest rate meeting in 2020, as the market expected to keep interest rates unchanged
it would conduct the first comprehensive strategic review since 2003, including assessing whether it is appropriate to approach the 2% inflation target, Brexit, climate Changes, side effects of negative interest rates, etc
European Central Bank President Christine Lagarde said at a press conference on Thursday that he hopes to make a decision on the future strategy of the European Central Bank in November or December this year. Data, etc., to analyze monetary policy.
Lagarde escorts negative interest rates
Although the ECB’s negative interest rate policy has been criticized by member states such as Germany in the past, it has pointed out that it will damage the interests of the public such as pensions and interest income of depositors. However, Lagarde countered that negative interest rates made it easier for companies and the real estate market to borrow, and low interest rates also prompted the EU to create more than 1 million new jobs. The Swedish central bank raised interest rates by 0.25% at the end of last year, ending the 5-year negative interest rate era. Lagarde believes that negative interest rates will help Sweden’s economic recovery. She reiterated that she would use all feasible tools to promote the economy and maintain inflation stability, which is also an authorized target of the central bank. She also said that the current low interest rate environment will remain for a long time.
The ECB ’s interest rate statement states that the interest rate on deposit instruments will be kept at -0.5%, the marginal lending rate will be maintained at 0.25%, and the refinancing rate will remain unchanged at 0%. Interest rates will remain at current or lower levels until inflation approaches targets.
In the third quarter of last year, the EU’s economy grew by 0.3% quarter-on-quarter, slightly stronger than the 0.2% in the second quarter. Lagarde said that the latest data show that the economic growth of the Euro area has stabilized, risks to growth prospects have eased, and underlying inflation has shown a modest rise.
Christian Sewing, Deutsche Bank’s chief executive, at the Davos forum criticized the ECB for failing to seize a strong economic time to leave the negative interest rate policy.
Norwegian and Indonesian Qiqi Brigade
The Norwegian central bank and the Indonesian central bank also discussed interest rates on Thursday, both banks maintained interest rates unchanged. The Norwegian central bank announced that the policy interest rate remained at 1.5%, and economic development was basically in line with expectations. The Bank of Indonesia maintained the 7-day reverse repurchase rate unchanged at 5%, in line with expectations. The current policy helps control inflation, support economic growth and maintain financial market stability. The central bank has been holding on since it cut interest rates last October.