Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.
    2021
    Best News & Analysis Provider
    FxDailyInfo
    2022
    Best Forex Educational Resources Global
    International Business Magazine

    ECB to keep floor under market rates but with eye on demand – Reuters

    Source Fxstreet
    Feb 29, 2024 06:31

    Citing four sources, Reuters reported on Thursday, the European Central Bank (ECB) policymakers’ meeting in Frankfurt last week agreed that the ECB would stick to a "floor" system, where the central bank effectively sets the lowest rate at which banks would lend to each other.

    Additional takeaways

    The ECB will not single-handedly decide how much liquidity it provides to the banking system once it has finished draining excess reserves some years from now.

    Policymakers agreed commercial banks would help determine that by borrowing the reserves they need from the ECB.

    To facilitate this, the ECB will make it cheaper for banks to borrow by lowering the rate on its weekly cash auctions, currently at 4.5%, and bringing it closer to its 4.0% deposit rate.

    Policymakers also agreed they would tolerate some fluctuations in the Euro Short-Term Rate (ESTR), the benchmark in the inter-bank market, around the ECB's own deposit rate.

    They expect to announce this new framework -- known in market parlance as a "demand-driven floor" -- next month, potentially as early as the ECB's non-policy meeting on March 13.

    Disclaimer: For information purposes only. Past performance is not indicative of future results.
    placeholder
    ECB's Vasle sees rates much closer to 3% at year-endThe European Central Bank (ECB) policymaker Bostjan Vasle said on Wednesday that the deposit rate should be "much closer" to 3% by the end of the year from a record high of 4% currently if disinflation continues as expected.
    Source  Fxstreet
    The European Central Bank (ECB) policymaker Bostjan Vasle said on Wednesday that the deposit rate should be "much closer" to 3% by the end of the year from a record high of 4% currently if disinflation continues as expected.
    placeholder
    Japan’s Hayashi: Won't rule out any steps to respond to excessive FX movesJapan’s Chief Cabinet Secretary Yishimasa Hayashi said on Thursday, he “won't rule out any steps to respond to excessive FX moves.” Additional quotes Won't comment on forex levels, currency intervention.
    Source  Fxstreet
    Japan’s Chief Cabinet Secretary Yishimasa Hayashi said on Thursday, he “won't rule out any steps to respond to excessive FX moves.” Additional quotes Won't comment on forex levels, currency intervention.
    placeholder
    Japan's Suzuki will not rule out any steps to respond to excessive FX movesJapanese Finance Minister Shunichi Suzuki offered some verbal intervention on Thursday.
    Source  Fxstreet
    Japanese Finance Minister Shunichi Suzuki offered some verbal intervention on Thursday.
    goTop
    quote