Fri October 18, 2024 ▪
3
min reading ▪ acc
The European Central Bank (ECB) recently announced a 0.25% cut in its main interest rate to 3.25%. The move marks the third rate cut this year as euro zone inflation continues to ease.
ECB cuts interest rates!
Year-on-year inflation in the eurozone fell to 1.7% in September, the lowest level in more than three years. This decrease in inflation is largely due to lower energy costs, which fell by 6.1% compared to the previous year. In response to this trend, the ECB decided to reduce borrowing costs to support economic growth in the region.
The deposit rate, the main refinancing rate and the marginal lending facility rate were also reduced to 3.25%, 3.40% and 3.65% respectively. The aim of these adjustments is to favor financing conditions for businesses and households in order to support domestic demand and support the economic recovery.
Stimulation of economic activity
The ECB’s decision comes against the backdrop of an economic slowdown in the eurozone. According to the institution’s forecasts, economic growth is expected to slow to 0.2% in the third quarter and to 0.8% for the whole of 2024. The ECB hopes to stimulate economic activity and encourage investment by cutting interest rates.
The ECB also emphasizes that this decision is based on an updated assessment of the inflation outlook and underlying inflation dynamics. The institution therefore remains committed to bringing inflation back to its 2% target over the medium term and will continue to adjust its monetary policy based on incoming economic and financial data.
In short, the ECB’s cut of interest rates to 3.25% reflects a strategy aimed at supporting economic growth in a context of low inflation. The measure should help stabilize the eurozone economy and boost investment while keeping a tight rein on inflation.
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The world is evolving and adaptation is the best weapon to survive in this wavy universe. Essentially a crypto community manager, I am interested in anything directly or indirectly related to blockchain and its derivatives. To share my experiences and raise awareness of a field that fascinates me, there is nothing better than writing articles that are both informative and relaxing.
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