The ECB cuts the rates of 25 basis points for the seventh time from last June and brings the rate on deposits, the reference rate, from 2.50% to 2.25%.
The rate on the main refinancing operations falls from 2.65% to 2.40%, that on marginal loans from 2.90% to 2.65%.
“The economy of the euro area has acquired a certain capacity for the sealing for world shocks, but the expansion perspectives have deteriorated due to the growing commercial tensions. It is likely that the greater uncertainty reduces the trust of families and businesses and that the adverse and volatile response of the markets to commercial tensions determines an unexpected of the financing conditions. These factors can further burden the economic perspectives for the area of the euro”: The ECB at the end of the Board of Directors.
The ECB, in its press release on interest rates, has abandoned the reference to the ‘restrictive’ condition of interest rates, a decision that probably reflects the fact that rates are now in the ‘neutral’ area. In his press release in March, the central bank explained that “monetary policy becomes significantly less restrictive”, a formula now completely abandoned.
Lagarde, on prospects economics exceptional uncertainty
“The economic perspectives are obscured by exceptional uncertainties”. This was said by the president of the ECB Christine Lagarde, referring to the “upsetting of international trade”, tensions on international markets and geopolitical uncertainty that weigh on consumption and investments.