Francois Villeroy de Galhau, head of the Bank of France and a policymaker at the European Central Bank, indicated in an interview that there is potential for reducing the current deposit rate to 2% by the coming summer. “Seen from where we are today, we could be at 2% by the coming summer,” he expressed to Alternatives Economiques.
This development follows a previous action on January 30, where the ECB cut its deposit rate by 25 basis points, bringing it down to 2.75%. This move was guided by concerns over sluggish economic growth, which began to outweigh the persistent issue of inflation.
Francois Villeroy de Galhau also highlighted the broader strategy for the European banks, suggesting that sector consolidation could bolster competitiveness on a global scale. His comments come amidst a backdrop of economic challenges and the ECB’s strategic shifts to manage them.
As the ECB navigates through economic concerns, the possibility of reducing the deposit rate to 2% reflects their ongoing efforts to stimulate growth and ensure global competitiveness. The coming summer could mark a significant step in this financial strategy.
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