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ECB Minutes: Risk of deflation relevant – Deutsche Bank

FXStreet (Delhi) – Jim Reid, Research Analyst at Deutsche Bank, notes that the risk of deflation remains very much in existence which was the theme of yesterday’s released ECB minutes.

Key Quotes

“The ECB minutes showed that it was argued that the ‘risk of deflation remained relevant’ and that ‘against this background, the view was put forward that a case could be made for considering reinforcing the ECB’s accommodative monetary policy stance already at the current meeting and, in any case, to act sooner rather than later’. Governing Council members also found it ‘necessary to step up communication and underscore the Governing Council’s determination and readiness to act’. Notably, the accounts also highlighted that ‘reference was made to the experience in other jurisdictions, where negative rates had not appeared to result in major difficulties or widespread substitution into cash’.”

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