European Central Bank “MANAGEMENT” has kept its interest rates unchanged but waiting for the updated data and changes can happen after checking the inflation rate which is coming next month.
Investors and Banks were looking for some relief from the Central Bank, but have to wait for the month of June to come. Too much low inflation is good for the economy, but only if Central Bank do something. Inflation is considered to be 0.5% in March and increased to 0.7% in April. Central Bank must decrease the refinance rate to create Development and everyone expects to increase the deposit rate by another 10 basis points.
There were differences between France and Germany “MANAGEMENT” regarding the future of Euro Zone. Germany was of the discussing that Euro currency has appreciated a lot, want policies to bring the appreciated currency down. Euro, had gained more than 4% against the United States Dollar within the six months. Reuter poll has suggested to bring Euro back to $1.42 v/s US$ 1 [United Stated Dollar] against $1.39 v/s US$ 1[United States Dollar].
Easing monetary policy of Euro Zone will be having limited damage to the currency Euro, now. Mario Draghi, Chief of European Central Bank wants to bring more liquidity and creating less interest rate. Here they can come up with Quantitative Easing [QE], maybe minting money to buy bad assets and create Development.
If it happens, home demand will increase and corporate loans will be picking up. This will bring a stable to bring the positive “MANAGEMENT” environment in the second quarter.
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