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Key interest rate forecast: ECB director expects interest rate increase in "summer or fall" 2019 | message



"Maybe in the summer or fall," she said in an interview that was published by the ECB on Monday on the ECB's website. When exactly the time came for a tightening, ultimately depends on the then economic data. According to the ECB's ruling, the main interest rate, which stood at 0.0 percent since March 2016, will not be touched "in the summer" in 2019.

The European Central Bank (ECB) has also announced that it will discontinue its $ 1 billion bond purchases by the end of this year. According to Lautenschlager, there is nothing on the horizon that could thwart these plans. The purchases of government bonds and other securities have been the ECB's main instrument in the struggle against a weak economy and, in its opinion, too low inflation in recent years.

Starting next year, she no longer wants to buy new papers, but only to replace them. The ECB has announced that it will maintain this policy for some time. Lautenschläger called for caution in the interview. "We should not long commit in terms of reinvestment, because we can not exclude that we will reach our inflation target more quickly than expected or that there will be more negative side effects from our loose monetary policy ", said the German ECB director.

ECB chief economist Peter Praet has indicated that the monetary authorities have probably been indicating for some time what they understand by a reinvestment policy at their meeting in December. In the markets this is probably about two to three years.

Berlin (Reuters)

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