Christine Lagarde has indicated for the first time that the ECB’s eight-year experiment with a negative rate will end within months, suggesting borrowing costs are on track to reach zero.
- In a blog, the ECB President indicated that based on the current outlook, the institution is likely to be in a position to exit negative interest rates by the end of Q3.
- The deposit rate is now -0.5 percent and has been in negative territory since 2014 when the region struggled with a sovereign debt crisis.
- The euro hit its highest level for a month against the dollar, partially offsetting concerns among officials that a weaker single currency would heighten price pressures.
The ECB president is under immense pressure to fasten the withdrawal of its ultra-loose monetary policy to deal with record-high Eurozone inflation.
EuroStoxx 50 up +0.49%, EURUSD up +0.85%
Source: European Central Bank
