
The European Central Bank reduced the base rate by only 25 basis points. Experts say that this was far far far far far far far far far far far
far>far far far>far far far>far lower and far far>far too late to get the stagnant economy moving. On Thursday the ECB reduced the central interest rate by 25 basis points to 2.75 percent. Photo: Mihkel Maripuu
European Central Bank reduced the base rate by only 25
basis points. Experts say, that this was too few and too late to get the stagnant economy moving.
Unfortunately, the reduction in the cost of borrowing funds is also not occurring at the pace that was expected earlier. If a few months ago monetary markets expected the basic interest rate on housing loans, the 6-month Euribor, to decrease to 1,9 percent this summer, then now futures deals show that the interest rate could stay at about 2.2 percent. For the Estonian borrower of a housing loan this means, that with the average amount of a credit of 150 150 000 euros the annual interest costs will be 300 euros more than expected previously.
On Thursday the ECB reduced the central interest rateby25basispointsto2.75percent.ExpertsbelievethatthisisnotenoughtoaccelerateeconomicgrowthinEurope,whichinthefourthquarterofthelastyear.remainedatthestilllevelcomparedwiththethirdquarter.