Frankfurt / Main (AP) - Europe's currency watchers are again forced to act. Given the global economic slowdown and the weakness of world trade, "significant monetary stimulus" is necessary, said European Central Bank (ECB) President Mario Draghi at the recent meeting of the ECB's Governing Council.
On this Thursday, the highest decision-making body of the central bank could follow action. The resolutions of the meeting in Frankfurt will be published in the afternoon (1.45 pm).
It discusses both new bond purchases and a tightening of the penalties for money that banks park at the ECB. At present, 0.4 percent interest is due - a burden on the industry of billions. Draghi had hinted that this negative deposit rate could be further reduced. To relieve financial institutions, a graduation is thought.
With the penalty rate, the central bank wants banks to pass on the many cheap money that the ECB has made available to companies and consumers so that it flows into investment and consumption. This should stimulate the economy and increase inflation. After all, inflation has been far from the target of the central bank, despite the ECB's expansionary monetary policy for years.
In the medium term, the ECB aims for an annual tax rate of just under 2.0 percent for the eurozone - far enough away from the zero mark. Persistently low or broadly falling prices can lead companies and consumers to postpone investment. That slows down the economy.
With the key interest rate of currently zero percent, the monetary authorities have already set in so far that with rising interest rates is not expected. At present, the ECB expects that key interest rates in the euro area will remain "at their current or lower levels for at least the first half of 2020".