The European Central Bank (ECB) is considering the possibility of cutting interest rates more than three times within the current year, according to a statement made by an ECB official, Simkus.
This potential move comes as the ECB aims to stimulate economic growth and combat the impact of global uncertainties, such as trade tensions and geopolitical risks.
Simkus suggested that the ECB could implement multiple rate cuts to support the Eurozone economy, which has been showing signs of slowing down in recent months.
The ECB's current deposit rate stands at -0.5%, and any further cuts would push it deeper into negative territory. Negative interest rates are intended to encourage banks to lend more money and stimulate spending and investment.
However, there are concerns about the effectiveness of further rate cuts, as they could potentially harm banks' profitability and impact savers who rely on interest income.
Simkus emphasized that the ECB is also exploring other monetary policy tools, such as forward guidance and asset purchases, to provide additional support to the economy if needed.
The ECB's decision on interest rates will depend on various factors, including economic data, inflation trends, and the overall outlook for the Eurozone.
Market analysts are closely monitoring the ECB's policy decisions, as they can have significant implications for financial markets and the broader economy.
It remains to be seen whether the ECB will indeed proceed with multiple rate cuts this year, as the central bank continues to assess the evolving economic situation and global developments.
