ECB - THE CAUSED OF EUR DECLINING With a few slivers of light at the end of the recessionary tunnel in the eurozone, it was no surprise to see the European Central Bank leave interest rates unchanged at 0.5 per cent, but in the process it indicated that interest rates would “remain at present or lower levels for an extended period of time” The “extended period of time” reference to easy monetary policy dominated ECB President Mario Draghi’s press conference after the official monetary policy announcement. When asked how long that time would be, he chose not to make a definitive comment, but noted that “it does not mean six or twelve months”. In other words, it will be years. Draghi again flagged the possibility of the ECB cutting interest rates below zero, noting that a 50 basis point cut to the current 0.50 per cent rate “is not the lower bound”. This caused the euro to fall against the US dollar to 1.2915, a five week low.
Posted on: Fri, 05 Jul 2013 02:19:12 +0000
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