QNB expects ECB to continue cutting interest rates

Doha: Qatar National Bank (QNB) expects the European Central Bank (ECB) to continue cutting interest rates on at least two occasions by 25 basis point...

Doha: Qatar National Bank (QNB) expects the European Central Bank (ECB) to continue cutting interest rates on at least two occasions by 25 basis points, reducing the deposit rate to 1.5 percent.

In its weekly report, the bank voiced belief that despite volatile short-term price pressures and growing concerns about trade disputes related to tariffs, risks related to weak growth performance are gaining more importance than concerns related to inflation.

Spiralling inflation in the Euro Area was finally stabilized last year after an unprecedented cycle of policy rate increases by the ECB, said the bank in its weekly commentary.

The most aggressive tightening sequence in the history of the ECB took the benchmark interest rate to 4 percent, as a response to the unprecedented post-Covid inflationary shock.

This was followed by a "holding" period of nine months, as the central bank waited for inflation to shorten the gap between the peak of almost 11 percent and the 2 percent target of monetary policy, QNB added.