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19 May 2014
ECB could cut re-finance rate - BBH
FXStreet (Guatemala) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman explained that the ECB could cut is the re-finance.
Key Quotes:
“It is at 25 bp and, under the current policy setting, the ECB is willing to provide as much funds at this rate as banks want, limited only by the acceptable collateral."
"A 10-15 bp cut in the re-fi rate seems to be the consensus view. The ECB also could extend the period for which is it willing to provide full allotment (unlimited funds)."
"There have been some calls to reduce the refi rate to zero, but this seems to be an outside possibility. Even though EONIA has traded above the refi rate, a lower refi rate may still exert downward pressure on overnight rates, albeit limited."
Key Quotes:
“It is at 25 bp and, under the current policy setting, the ECB is willing to provide as much funds at this rate as banks want, limited only by the acceptable collateral."
"A 10-15 bp cut in the re-fi rate seems to be the consensus view. The ECB also could extend the period for which is it willing to provide full allotment (unlimited funds)."
"There have been some calls to reduce the refi rate to zero, but this seems to be an outside possibility. Even though EONIA has traded above the refi rate, a lower refi rate may still exert downward pressure on overnight rates, albeit limited."