Although the service sector in the euro area continues to be resilient, we should not take its ability to remain strong in the negative impacts lightly, Draghi said.
On September 12, the European Central Bank announced that it would cut interest rates and restart QEs combination punch by lowering deposit rates by 10 basis points to -0.5%, the first time since March 2016 that it had cut key interest rates in the euro area. At the same time, the ECB will purchase 20 billion euros per month of bonds from November 1; adjust the forward-looking guidelines, expecting that the key interest rates in the euro area will remain at or below the current level until the inflation outlook is strong enough to approach the policy objectives; start the deposit rate classification, will introduce a two-tier system for negative interest rate policy, and some banks. The excess liquidity held will not be affected by negative interest rates.
It is worth noting that Philip Lane, the chief economist of the European Central Bank, reported in the Financial Times on September 17 that the European Central Bank is ready to lower interest rates further in the negative range if necessary. Lane said the ECB would meet inflation targets at all costs.
Source of this article: Sino-Singapore Editor-in-Charge of Longitudinal and Weft: Yang Bin_NF4368