ECB's Holzmann Says Interest Rates Unlikely To Turn Positive In 2020

ecbank sep12 27dec19

The European Central Bank is unlikely spring any major surprise next year by raising interest rates into positive territory, policymaker Robert Holzmann said Friday.

"I do not expect a turnaround in 2020 to a positive interest rate environment," Holzmann, who heads Austria's central bank, said in a statement. "In terms of content, however, we will certainly continue to deal with the topic of green finance next year."

Eurozone interest rates were raised last in July 2011, by 25 basis points. The previous change was a 10 basis points cut in the deposit rate in September.

The main refi rate is now at a record low 0 percent, the deposit rate at -0.50 percent and the marginal lending rate is at 0.25 percent.

Referring to Boris Johnson's victory in the UK election, Holzmann said the new year is likely to see Britain leave the European Union. The losses for the UK are set to be significantly higher than for the EU and Austria, even in the event of a "soft Brexit", he said.

"The transition period ends in December 2020; An increase in uncertainty is then likely, because there is little time left for negotiations on future relationships and the outcome of the negotiations is open," Holzmann added.

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