The European Central Bank (ECB) presents its first interest rate decision of the year. Policymakers are probably not going to tinker with interest rates. But it is not inconceivable that the central bank should make any further changes to its bond buy-back programme.
The latest interest rate decision also extended this programme. The ECB then considered it necessary to further support the euro area economy in connection with the new lockdowns announced in many European countries. Both the interest rate and the incitement of the money press are resources at the ECB ‘ s disposal to steer the economy.
Central Bank head Christine Lagarde recently stated that he would like to stick to the economic forecasts issued by the ECB in December for the time being. But the ever-stricter and longer lock-down measures against the expanding coronavirus may put pressure on those projections.
Interest rates in the euro area have been very low for a long time. The effects of this are clearly felt by the average Dutchman. For example, bank interest rates have fallen to low levels. The situation on the housing market, where low interest rates are driving up housing prices, is also becoming dire. Furthermore, the low interest rate affects the performance of pension funds and insurers.
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