Arab Today, arab today ecb monitors impact of antideflationary measures
Last Updated : GMT 02:30:17
Arab Today, arab today
Arab Today, arab today

ECB monitors impact of anti-deflationary measures

Arab Today, arab today

Arab Today, arab today ECB monitors impact of anti-deflationary measures

ECB
Frankfurt - AFP

The European Central Bank is unlikely to make new policy moves at its monthly meeting next week, focusing instead on monitoring the impact of last month's unprecedented package of measures.
After cutting rates last time round and pre-announcing new liquidity measures in its battle to prevent the single currency area from slipping into deflation, the ECB will "sit tight" at its meeting on Thursday, central bank watchers predicted.
"The ECB is clearly going to sit tight for now at least while the interest rates and liquidity measures it announced at its June meeting increasingly kick in," said Howard Archer at IHS Global Insight.
"Indeed, a number of senior ECB policymakers have indicated that the bank is unlikely to act again in the near term at least, as it will take time for its recent announced package of measures to take full effect," the expert continued.
At its June meeting, the ECB entered uncharted waters, taking one of its key interest rates into negative territory for the first time.
It lowered its benchmark refinancing rate to 0.15 percent and cut the deposit rate, the rate at which the central bank pays commercial banks for depositing their unused cash, to minus 0.10 percent.
This means that banks will be charged for parking funds at the ECB, in the hope they might lend it on to businesses and consumers instead.
ECB chief Mario Draghi also unveiled plans to pump more liquidity into the financial system later this year via the Targeted Long-Term Refinancing Operation (TLRTO).
These are different to the liquidity measures it took at the end of 2011 and the beginning of 2012.
At that time, banks did not lend the cash on to the small and medium-sized companies that form the backbone of the eurozone economy and so this time, the ECB is targeting the loans to encourage banks to lend to households and non-financial corporations.
- Other measures up sleeve -
With regard to further follow-up action, Draghi promised in early June that the ECB would "if required ... act swiftly with further monetary policy easing."
But he admitted that in terms of interest rate cuts alone, there was no further room for action.
"For all the practical purposes we have reached the lower bound," he said.
Analysts therefore believe the ECB has other possible measures up its sleeve, even so-called quantitative easing (QE) -- widescale purchase of sovereign debt practised by other central banks, but which the European bank has steered clear from imitating so far.
"The ECB has indicated that it is prepared to take further action if the risk of prolonged too low inflation morphing into deflation persists," Archer at IHS Global Insight said.
"And the ECB will likely want the market to keep thinking that further policy action is a very real possibility so as to keep downward pressure on the euro and market interest rates."
Capital Economics economist Jennifer McKeown also believed that the ECB "is very unlikely to unveil additional policy support at its policy meeting on July 3 as it waits to judge the effect of the raft of measures announced in June."
She expected Draghi to reiterate that interest rates should be on hold for a long time yet.
"He will probably also explain that a broader programme of quantitative easing involving government bond purchases is within the ECB's mandate. But he will claim that inflation expectations are well anchored and that such steps are not necessary for now," she said.
Commerzbank economist Michael Schubert said the ECB "will probably want to wait and see what impact the steps taken so far will have.
"At the same time, ECB president Draghi is set to leave the door wide open for QE at the press conference," he suggested.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today ecb monitors impact of antideflationary measures Arab Today, arab today ecb monitors impact of antideflationary measures

 



Arab Today, arab today
Arab Today, arab today Prepares to present her new collection

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Optimism on the front line

GMT 07:24 2017 Monday ,20 February

Optimism on the front line
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Egypt to hold first session of Arab film festival

GMT 21:11 2017 Saturday ,18 February

Egypt to hold first session of Arab film festival
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 21:49 2017 Thursday ,16 February

Scientists develop new therapy

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 13:16 2017 Tuesday ,14 February

First fashion model with Down syndrome
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday