ECB discloses shocking stimulus moves
The European Central Bank has already reduced its major interest rate to a shocking value of 0% from 0.05%, following a long-awaited bundle of urgent measures to revive the EU’s economy.
Europe’s central bank is going to drastically expand its ongoing quantitative easing measures to €80bn from €60bn a month. Furthermore, the package also included a deposit rate cut to -0.4% to -0.3%. The measures taken have appeared to more radical than most market participants expected. Financial analysts stress that by simply doing this, the ECB tries to go ahead of upbeat sentiment right after December’s lesson.
Though these stimulus measures were firstly announced three months ago, they mostly failed to ensure economic growth.
By the way, Mario Draghi, the major European bank’s governor informed that eurozone inflation forecasts had been cut, following the recent tumble in crude prices.
The ECB expected a 0.1% inflation this year, much lower compared to the previous 1% forecast. In 2017, inflation is expected to soar to 1.3%, while this year may count on 1.6%, according to recent estimates. So, deflation is almost unreal here.