The ECB held interest rates steady on Wednesday, shortly after the IMF sharply downgraded its growth forecast for the euro zone economy.
The European Central Bank held interest rates steady on Wednesday, shortly after the International Monetary Fund sharply downgraded its economic growth forecast for the euro zone economy.
Interest rates on its marginal lending facility and deposit facility will remain unchanged at 0%, 0.25% and -0.40%, respectively. These have been at record lows following the euro sovereign debt crisis of 2011 in an effort to boost inflation and stimulate growth.The euro zone's central bank, for those nations that share the single currency, ended its massive bond-buying program back in December.
The IMF also sharply downgraded growth in the euro zone. It now expects the bloc to grow at 1.3% in 2019 — 0.6% lower than its forecast had been six months ago. As such, one option under consideration is a tiered deposit rate. This aims to protect banks from part of the cost incurred by negative rates — akin to moves taken by central banks in Switzerland and Japan.
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