Interest rate rise postponed for at least another year
Thursday, June 13, 2019 @ 10:05 AM
THE EUROPEAN Central Bank's (BCE's) decision to postpone interest rate increases across the board means mortgages and credit in general in Spain and other common currency countries are likely to remain stable for some time.
According to the BCE's board of governors during a recent meeting in the Lithuanian capital of Vilnius, interest charged to high-street banks across the Eurozone for excess of reserves would remain at its current 0.4% until at least the middle of 2020.
This is the second time since 2011 that the BCE has postponed an interest rate rise, having previously said that they would start to climb by summer 2019 or, at the latest, the end of this year.
Although the interest charge on excess of reserves is different from the Euribor, or consumer interest across the Eurozone charged on mortgages, credit cards, for late payment, and other general finance, the decision announced by the BCE is part of a general policy of keeping rates down in order to encourage the flow of funding throughout bloc of countries which use the euro.
The BCE wants to aim for a rate of inflation of about or just below 2%, but no higher, and despite rock-bottom interest, it was still only at 1.2% in May and 1.7% in April.
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