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Frankfurt – ECB President Mario Dragi said that there is still a need for "significant leverage in monetary policy", even as the Eurozone economy grows solid.
Source: Beta
Photo: Thinkstock" />
The bank announced that it will gradually reduce its incentive program by buying bonds by the end of the year and will keep interest rates at the current level until the end of 2019. For now, it's not clear if that means until July, up to the end of the year. to September or later.
The ECB's short-term interest rate has remained at its historically low level, while that of commercial bank deposits would remain below 0.4 percentage point. It is a punishment intended to force the bank to lend money and thus to support the economy, rather than accumulate cash reserves.
In the United States, the Federal Reserve's main reference rate is between 1.75% and 2%, and this year is expected to increase further.
The ECB cuts the incentive program because of the growth of the European economy, but it slows considerably more than the federal reserves that have already begun to raise interest rates . The Fed is much faster than the ECB has reduced incentives since the US economy emerged faster from the Great Recession and now has a lower unemployment rate.
The central banks of Britain and Japan are also slowly reducing the incentive measures they have put in place in support of the economy during and after the global financial and economic crisis. the Great Recession
