Category: general

The post Current level of interest rates is appropriate appeared com. European Central Bank Vice President Luis de Guindos said during the European trading session on Monday that there is no need for an adjustment in the current level of interest rates, unless inflation developments change or projections are modified. Additional comments Services, wages are moving in the right direction. Inflation will be very close to 2% target. Growth is positive but still very low. Need to be very prudent and cautious in policy setting, even though level of uncertainty has declined. But so far, we firmly believe that the level of interest rates is correct. Market reaction The impact of the ECB de Guindos’ comments appears to be insignificant on the Euro (EUR). The EUR/USD pair has been trading in a confined range around 1. 1557 since the opening. ECB FAQs The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets usually government or corporate bonds from banks and other financial institutions.