ECB May Need Lower Rates to Attain QE Target, Standard Bank Says
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The European Central Bank will have to cut its deposit rate further to ensure enough government bonds are eligible for purchase under its sovereign-debt purchase program, according to Standard Bank Plc.
ECB President Mario Draghi said in Nicosia, Cyprus, Thursday that the central bank’s 1.1 trillion euro ($1.2 trillion) quantitative easing plan won’t include debt with yields below its minus 0.2 percent deposit rate. At minus 0.209 percent, the rate on German two-year notes is already below that threshold, while the yields on equivalent Belgian, Austrian and Dutch securities are all within seven basis points of the level.