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ECB Won’t Hike Deposit Rate Before 2018

ECB Won’t Hike Deposit Rate Before 2018ECB Won’t Hike Deposit Rate Before 2018

The European Central Bank will not raise its deposit rate until next year at the earliest, according to more than three-quarters of euro money market traders polled by Reuters. Recent better-than-expected economic data from the eurozone has fuelled market speculation the ECB might move away from its ultra-easy monetary policy and raise interest rates as a first move. But comments from three of the central bank’s top policymakers last week suggested it will not deviate from its current policy plan, including record-low rates and monthly asset purchases, until inflation picks up and the economy is on a healthy growth path. Asked when the ECB will raise its deposit rate, currently -0.40%, eight of 18 traders said next year, five said in 2019 and one said in 2020. The remaining four respondents said the ECB could move as early as this year. A regular survey of 22 traders showed banks are expected to borrow €13.0 billion ($13.8 billion) at the ECB’s weekly refinancing operation, a touch less than the €13.2 billion maturing from last week.

 

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