Report
The ECB’s policy is highly disruptive for the euro zone’s neighbouring European countries
The ECB is keeping interest rates at zero very late into the economic cycle. In some of the euro zone’s neighbouring countries (Central European countries, Sweden), growth is high and inflation is therefore picking up. Yet these countries are maintaining very low interest rates. If these countries’ monetary policies reacted normally to their economic cycle, their interest rates would become much higher than those in the euro zone and their exchange rates would appreciate sharply. It is without doubt to stave off this appreciation that interest rates are being kept at a very low level in the euro zone’s neighbouring countries. The ECB’s persistently expansionary monetary policy is therefore highly disruptive for monetary policy in the se countries.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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