ECB Members Want More Time Before More Monetary Easing
The European Central Bank (ECB) eased the monetary policy again last month. They cut interest rates in September and announced a new round of QE (quantitative easing) programme which will start next month. This month, they kept things unchanged as we saw earlier this week, although markets are expecting another rate cut until the end of this year.
But, ECB members think that they need more time to see how September’s actions will work before taking any more steps. ECB members Muller and Vasiliauskas made a few comments today suggesting just that. Below are their remarks:
Comments by ECB member Madis Muller
- Need to open discussion on a new ECB policy framework in the coming quarters
- Need to give time for existing policies to see how they work
Comments by ECB member, Vitas Vasiliauskas
- Some divergence of views within the ECB is expected
- September package was to act in a preventive manner
Vasiliauskas is saying that the package announced in September was preventive, but in reality it wasn’t so preventive because the Eurozone economy has been weakening for more than a year. Muller is implying that the ECB should gite some time for the September package to see how it will work before easing further. This is sort of bullish for the Euro since markets are expecting another cut this year. If the ECB keeps this stance, the Euro should turn bullish for some time.
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