Falconpowers – The European Central Bank (ECB) kept interest rates unchanged at a record high level on Thursday but sent a clearer signal that it may be preparing to cut them as inflation continues to decline in the Eurozone.
The ECB, which oversees the currency of the twenty nations that use the euro, maintained the deposit interest rate at 4.0%, unchanged since September, as part of its ongoing efforts over the past year and a half to curb prices.
However, with inflation now approaching the ECB’s target of 2% and bank lending stalled, coupled with sluggish economic growth, the ECB issued new hints about the possibility of lowering interest rates at its upcoming meeting.
The ECB stated, “If the updated assessment of the Governing Council on inflation outlook and underlying inflation dynamics increases its confidence that inflation is steadily converging to the target, it would be appropriate to lower the current level of monetary policy accommodation.”
