In the minutes of the January meeting of the ECB governing Council, who today, February 18 was published on the website of the Bank, said that members were “unanimous on the fact that monetary policy needs to be reviewed at the next meeting of the governing Board in early March”.
Risks for the European economy will grow amid volatility in commodity and financial markets. Negative impact and slowdown of emerging economies, including China.
The majority of Board members believe that inflation in the EU for many months will be far below the targets of 2%, it will be negative due to low oil prices. “The continuing significant deviations from targeted inflation rates can be mistakenly interpreted either as an unwillingness (ECB) to act, or lack of effectiveness of monetary policy,” notes the ECB.
In the minutes of the meeting of the ECB States that in the face of rising risks necessary “pre-emptive action”. The ECB stressed that if required he is ready to take further measures to stimulate the economy.
“The published minutes of the meeting of the governing Council of the ECB underlines that the ECB is ready to active actions”, — said The Wall Street Journal Capital Economics economist Jessica hinds.
In December 2015 the ECB’s Deposit rate was lowered from 0.2% to 0.3%. In January she was left unchanged.
Interviewed by Reuters, experts expect that the rate will be reduced by 10 percentage points to minus 0.4 per cent. ECBWATCH analysts believe that in 2016 Deposit rate will be lowered to minus 0.5%.
At the end of January the ECB President Mario Draghi said the probability of revision of the quantitative easing program of €1.5 trillion. 15 February, Draghi said that the ECB in March at the next meeting ready to take decisive action if necessary. Some financial analysts believe that a further decline in Deposit rates may have a negative effect for the European economy. This opinion, in particular, analysts at Morgan Stanley. They believe that a further decline in rates will have a significant impact on the Euro and will hit the profitability of banks. Further lowering of the rates Morgan Stanley has called a “dangerous experiment”.