ECB’s Villeroy - Negative rates effective but have limits

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    ECB governing council member Francois Villeroy de Galhau assured markets today the bank is ready to act with right instruments to meet the inflation target, but maintained there is a limit to how low negative rates can go.

    Key quotes

    Repeats no signs of bubbles in financial markets

    TLTROs meant to spur lending, not offset neg rates

    Negative rates effective but have limits

    Broad range of instruments to attain 2% inflation target

    ECB measures to add 1 pt to inflation in 2015-2017

    Despite deflationary pressures, does not see deflationary dynamics of falling prices, wages and asset prices

    Euro zone is facing "deflationary pressures" from Oil prices and emerging market slowdown
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