PARIS (Reuters) – The European Central Bank is likely to further ease interest rates next year and is at ease with market projections for future rates, ECB policymaker and Bank of France head Francois Villeroy de Galhau said on Friday.
“There will be further rate cuts next year,” Villeroy told BFM business radio.
“There is no commitment in advance to a trajectory on rates…I note that we are collectively rather comfortable with the financial markets’ interest rate forecasts for next year,” he added.
The European Central Bank cut interest rates for the fourth time this year on Thursday and kept the door open to more easing as the euro zone economy is dragged down by political instability at home and the threat of a fresh U.S. trade war.
The ECB settled on Thursday on a rate cut of 25 basis points, taking the ECB’s deposit rate, the benchmark for borrowing costs across the 20-nation currency bloc, to 3%.
The central bank also removed an earlier reference in its guidance to keeping interest rates sufficiently restrictive, which economists took as a sign that further policy easing is coming – perhaps as soon as January, as inflation is seen settling at the ECB’s 2% target in early 2025.
(Reporting by Dominique Vidalon; Editing by Benoit Van Overstraeten and Sudip Kar-Gupta)
