ECB Benchmark Rate at 1%: Any More Rate Cuts Left?
Verfasst von hkarner am 3. Juli 2009
• July 2: ECB kept benchmark refinancing rate at 1% despite eurozone inflation dropping below zero percent. Signs of economic stabilization emerged. ECB announced it will start Quantitative Easing (QE) operations on July 6
• In a context of falling GDP growth and inflation, slowing money supply growth and rising unemployment, the ECB is likely to keep rates low in 2009, though analysts still debate whether 1% will be the trough for the main refinancing rate, which has lost significance to overnight money market rates since banks now look to deposit their money rather than lend it out
