9/18/2019, 11:36 AM (Source: TeleTrader)
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De Guindos: Governments must stimulate economy

The European Central Bank has lowered its deposit rate by ten basis points to a negative 0.5% "to send a signal to the market," its Vice President Luis de Guindos said on Wednesday. Speaking in Madrid, he reiterated the determination to keep borrowing costs low before inflation rebounds to target but also added "it cannot continue like this in the coming years" and expressed the need for greater fiscal homogenization in the Eurozone.

Monetary policy cannot be the only instrument for healing the economy, the top rate-setter stressed and called on countries with enough maneuvering space to boost expenditures. He highlighted productivity and competitiveness as crucial. De Guindos estimated economic growth may continue to be soft in the fourth quarter.

Turning to the risk of a hard Brexit, to which he again attributed the external headwinds together with the trade war impact, he said financial markets don't see it as final.

Baha Breaking News (BBN) / IT