If the economic situation in the Eurozone were to deteriorate further, the ECB could cut interest rates. This is what the member of the governing council of the Central Bank Ewald Nowotny acknowledged in an interview with Market News International.
Rumors of a possible revision of monetary policy had intensified in recent days. "Everything depends on the next developments", said Nowotny referring to the possible "further downward revision of the economic estimates by the ECB staff".
Another member of the ECB, Yves Mersch, acknowledged the possibility of reducing the discount rate "if there were to be a significant worsening of the economic dynamics in the euro", however considering speculation about an imminent cut as "wild".
It was among others a London economist of Jp Morgan Chase who, last Friday, relaunched the expectations for the maneuver of the ECB. Which, according to the hypothesis of the analyst of the investment house, could reduce the discount rate by half a point, bringing it to 1%. The cut, it has been argued, could be facilitated by the handover between outgoing ECB president Jean-Claude Trichet and Mario Draghi
