ECB May Raise Interest Rates Before Ending QE

The European Central Bank will decide at a later time whether to raise interest rates before or after ending its bond purchase program, ECB policymaker Ewald Nowotny told a newspaper on Thursday.

The Austrian central bank governor said the ECB could hike its remuneration of bank deposits, currently below zero, before the main rates at which it lends to banks.

His comments raise questions about the ECB’s own guidance, reiterated only a week ago, that rates will stay at the current level, or even fall, until well after the ECB’s 2.3 trillion euros ($2.48 trillion) bond-purchase program ends.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.