The European Central Bank is expected to raise its deposit rate from negative territory by the end of September and could raise it further, ECB President Christine Lagarde said on Monday.
“Based on the current outlook, we will likely be able to exit negative rates by the end of the third quarter,” Lagarde said in a blog post published on the ECB’s website and reported by Reuters.
“If we see inflation stabilizing at 2% over the medium term, then gradually further normalizing interest rates towards the neutral rate will be appropriate,” Lagarde added, even opening the door for further rate hikes “if the euro area economy overheats.” .” .
The ECB’s deposit rate is currently -0.5%, meaning banks have to pay fees to park cash at the central bank.
The euro rose 0.9% to $1.0663 on Monday but is down more than 6% so far this year.
See also: The euro will reach parity against the dollar this year, says Europe’s largest fund manager
Vincent Mortier, chief investment officer at Europe’s largest fund manager Amundi, said earlier this month that the single currency could reach parity against the dollar within six months amid fears of a recession for the region. The post-COVID economic recovery has been complicated by Russia’s invasion of Ukraine, which has sent energy and other commodity prices soaring.
https://www.marketwatch.com/story/ecb-likely-to-get-out-of-negative-interet-rates-by-end-september-lagarde-says-11653297457?rss=1&siteid=rss The ECB will likely exit negative interest rates by the end of September, says Lagarde