The central banks of the world’s main economies emphasize their monetary policy in the heat of the commercial conflict initiated by Donald Trump and the war in the Middle East. After the decision of the US Federal Reserve (Fed) to keep the interest ratessome entities of the old continent defined their next movements.
Officials of the European Central Bank (ECB) They gave some sEñales of future cuts in the rates, although they did not specify possible dates and implied that the containment of inflation will be prioritized. The Swiss National Bank reduces interest rates to zero, while its Norwegian pair also lowered the rates. For its part, the Bank of England decided to keep them without changes.
The ECB signals on the rates
If the European Central Bank decides to modify interest rates in the next six months, it is most likely that it is a cut, said the governor of the Bank of France and head of the MONEARY POLICY of the ECB, François Villeroy de Galhau.
The ECB announced this month a pause in the relaxation of monetary policydespite the fact that forecasts suggest that price growth will be temporarily below its 2%target.
“Unless there is an important exogenous shock, including possible new military events in the Middle East, If monetary policy had to move in the next six months, it could be more in the direction of relaxation, “said Villey in a speech at the European University Institute in Italy.
Villeroy said the ECB would monitor the situation in search of signs of infection of energy prices to underlying inflation and the broader prices expectations, which could induce him to adapt monetary policy accordingly.
Although oil prices have risen since the minimums registered before Israel’s action against Iran, the strength of the euro helps to compensate for the impact on Europe.
According to Villeroy, a 10% appreciation of the euro exchange rate broadly compensates for the inflationary effect of an increase of 10 euros in the price of oil.
TRUGS IN Switzerland and Norway
For its part, The Swiss National Bank (BNS) reduced its interest rate to zero This Thursday in the decline in inflation, the upward pressure on the Swiss Franco and the economic uncertainty caused by the commercial policy of the United States government.
The entity reduced its official interest rate at 25 basic points from 0.25%, as expected by markets and a reuters poll. It was the sixth cuts of consecutive rates of the Central Bank after it began to reduce the costs of loans in March 2024. The BNS is now on the verge of returning to negative interest rates, a policy that maintained from 2014 to 2022, but which was unpopular between banks, savers and insurers.
Meanwhile, Thursday’s surprise was the reduction of rates from the Central Bank of Norway. The cut was 25 basic points, up to 4.25%. It was the First decline in debt costs in five years and the decision he made by surprise most analysts.
“Economic perspectives are uncertain, but if the economy evolves in general as currently expected, the official interest rate will be further reduced in the course of 2025,” said Norges Bank in a statement.
England slows the feat of fees
Meanwhile, the Bank of England maintained its reference interest rate at 4.25% this Thursday, as expected widely. Thus, he maintained his orientation towards a gradual approach to monetary policy.
This decision was made after the Central Bank to cut its reference rate at 25 basic points from 4.5% in May, in what had been the second reduction of this year and the fourth from the maximum reached last year of 5.25%.
However, the decision to maintain unaltered interest rates was not unanimous, with three responsible for the English monetary policy of the nine members of the Monetary Policy Committee (MPC) who voted in favor of cutting the rates again.
Source: Ambito
