THE European Central Bank has held its key interest rates steady and looks set to keep them there for some time amid signs the eurozone debt crisis is stabilising, analysts say.
As widely expected, the ECB's decision-making governing council voted at its first policy meeting of 2013 to hold the bank's main refinancing rate at its current historic low of 0.75 per cent.
At the end of last year, there had been speculation the ECB might pare back rates further should the seemingly never-ending eurozone debt crisis tip the economy of the 17-member euro area deeper into recession.
Last month central bank chief Mario Draghi revealed the decision to hold rates steady had been anything but clear-cut and there had even been "wide discussion" of a possible rate cut.
But there was no such talk this time round and the decision to maintain the status quo was "unanimous" in view of signs that the economic environment has calmed, he told reporters on Thursday.
"If you look at the overall landscape taking, let's say, a medium-term perspective ... you will see a significant improvement in financial market conditions and a broad stabilisation of some conjunctural indicators," Draghi said.
Among a long list of positives, he pointed to lower bond yields, higher stock prices, record-low volatility, strong capital inflows into the eurozone, a halt of deposit flight in peripheral countries and a reduction of the ECB's balance sheet.
In fact, borrowing costs for both Italy and Spain tumbled in their first sovereign bond sales of the year on Thursday.
"All in all, we have signs that fragmentation is being gradually repaired," Draghi said.
But he was quick to caution: "The jury is still out. It's too early to claim success. All this has not found its way into the real economy yet. So the real economy continues to be weak as we had discussed in our projections last month."
Nevertheless, while last year the overriding fear had been one of "contagion" and that the crisis would deepen and spread, there was also "positive contagion when things go well", Draghi said.
ECB watchers agreed that the likelihood of additional rate cuts is fading.
"A rate cut seems very unlikely in the foreseeable future," said Marie Diron at Ernst & Young Eurozone Forecast.
A rate cut would not help a great deal and could even hinder the banks' profitability, Diron said.
"Other measures are needed to spur growth in the eurozone, including further progress on banking union and a rebalancing between fiscal austerity and economic reforms," she said.
For IHS Global Insight analyst Howard Archer, the ECB "appeared to close the door to an interest rate cut in the near term at least".
"Nevertheless, we still think it is more likely than not that the ECB will end up cutting interest rates from 0.75 per cent to 0.50 per cent," Archer argued, pointing out that the ECB acknowledges the economic weakness will continue in 2013 and that the risks were to the downside.
Anda sedang membaca artikel tentang
Rate cuts off ECB table as crisis eases
Dengan url
http://citylifehealt.blogspot.com/2013/01/rate-cuts-off-ecb-table-as-crisis-eases.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Rate cuts off ECB table as crisis eases
namun jangan lupa untuk meletakkan link
Rate cuts off ECB table as crisis eases
sebagai sumbernya
0 komentar:
Posting Komentar