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The European Central Bank has reduced its interest rate interest rate by a quarter point to 2.75 percent as it seeks to respond to poor eurozone growth and decline in inflation levels.
Thursday’s landing came hours after Euroson reported that the Eurozone economy had not grown at all in the fourth quarter of 2024 and the day after the US Federal Reserve was holding tariffs, despite President Donald Trump’s calls to reduce borrowing costs ” a lot. “
In a statement accompanying the abbreviation, which receives the level of ECB deposits at its lowest level since the beginning of 2023, the Central Bank noted that “monetary policy remains restrictive” – an acknowledgment that norms of Interest is even higher than the neutral level that neither stimulates nor holds nor holds. behind the economy.
The euro was initially unknown by the widely expected movement, dropping 0.1 percent to the dollar on the day at $ 1,041.
ECB has now reduced the rates five times since last summer and trading shortly after the decision, the exchange markets were prices in two or three other cuts of the quarter by the end of the year, unchanged from the beginning of the day.
The Central Bank provides only a slight growth acceleration from 0.7 percent for the previous year up to 1.1 percent this year.
In contrast to the slow progress of the eurozone, the US economy expanded at an annual rate of 2.8 percent in the third quarter of last year.
The expectations of investors that ECB will lower rates than the Fed this year have weakened the euro, which has approached equality with the dollar.
In a relocation from the previous Hawkish language, in December ECB threw a commitment to “maintain sufficiently restrictive policy norms as long as it is necessary” to reduce inflation in accordance with its 2 percent target.
Inflation has fallen from a peak of 2022 from 10.6 percent to 2.4 percent in December.
This is a developing story
