Zone euro - Taux d'intérêt

The ECB left its key interest rates and stimulus package unchanged during Christine Lagarde's first policy meeting in charge on December 12th, with the main refinancing rate remaining at 0 percent and the deposit rate at -0.5 percent. Policymakers said they expect interest rates to remain at their present or lower levels until the inflation outlook converges to their aim. The bank also cut its growth forecast for 2020, due to weak trade growth, while inflation is seen below the 2% target through at least 2022.

The EA economy faces a global environment that is marked by uncertainty, but it can also be a moment of opportunity if the bloc approaches the challenge in the right way, Lagarde said in her first speech as ECB President at the Frankfurt European Banking Congress. Ms Lagarde noted that the best way to respond to the challenges presented by trade tensions and technological disruption is to invest in the bloc's future, strengthen the common institutions and empower the world’s second largest economy, while called on European governments to boost public investment.

ECB policymakers agreed that September's stimulus measures should be allowed more time to fully unfold their effects on the Euro Area economy and on inflation outlook despite concerns about the possible side effects, particularly given that some of the measures had yet to be implemented, minutes of Mario Draghi's last policy meeting showed. Officials also made a "strong call" for unity after several members opposed the stimulus package in September, and reiterated that fiscal policy had to play a more prominent role in supporting growth.

Bank profitability prospects in the Euro Area have weakened against the backdrop of the deteriorating growth outlook and the low interest rate environment, especially for banks also facing structural cost and income challenges, the November Financial Stability Review showed. Banks’ non-performing loans ratios have improved slightly since the previous FSR, driven by both solid loan growth and continued, albeit slowing, reductions in NPL. Going forward, weaker economic activity and the related increase in new default inflows may make further reductions in NPL ratios more challenging.

The European Central Bank kept rates on hold during Mr. Draghi’s final meeting on October 24th with the main refinancing rate remaining at 0 and the deposit rate at -0.5 percent. The bank said it expects key interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon.

Several ECB policymakers opposed the new bond purchases and a multi-tier deposit rate, even as all members reiterated the need for a highly accommodative stance of monetary policy for a prolonged period of time, minutes of the September meeting showed.