The President of the Bundesbank has good news for savers.
(Photo: dpa)
Frankfurt In the view of Bundesbank President Joachim Nagel, the European Central Bank (ECB) may soon initiate a turnaround in interest rates in view of skyrocketing inflation figures. The bond purchase programs would be reduced to 20 million euros per month by June, Nagel told the ARD business magazine “plusminus” in an interview published on Wednesday. “That’s quite a number compared to the previous numbers,” he said.
In June, the ECB will then make a new decision based on new data. “What we are now seeing at the current edge indicates that savers may soon be able to look forward to higher interest rates again,” said Nagel.
The European Central Bank (ECB) last raised interest rates in 2011. The key interest rate for supplying financial institutions with money is currently at a record low of 0.0 percent. The deposit rate is even minus 0.5 percent. A deposit rate below zero percent means that banks have to pay penalty interest if they park excess funds with the central bank.
The Bundesbank President is worried about the high inflation rate of 7.3 percent in Germany. He explained that people with low or middle incomes in particular would be hit particularly hard by the high prices. “And that’s where we have to go. We as central bankers. These high inflation rates must not be allowed to persist,” said Nagel. That will certainly be a task, especially for the euro central bank this year.
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According to Nagel, there are many well-known special factors in inflation. “Of course now again through this terrible war,” he added. An improvement can then be expected if certain price increases move out of these calculations again. “But overall it’s obviously a development that we can’t like,” he explained. “And we already expect an annual average inflation rate of 6 percent in 2022. And of course that is too much.”
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