Question

1.please read the below press release.Explain which objectives of central Bank's monetary policy will be influenced and how ? What will be the impact on the country's economy.
On 24 October 2019,press release: Central bank of malta Website
At today's meeting the governing council of the European central bank decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%,0.25% and -0.50% respectively.The governing council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly coverage to a level sufficiently close to, but below,2%within it's projection horizon,and such convergence has been consistently reflected in underlying inflation dynamics. ...

Answer 1

Objective :-

The primary objective of the ECB(European central bank) under Article 127(1) TFEU (Treaty on the Functioning of the European Union)is to guarantee price stability..

How to influenced :-

A negative deposit rate is meant to encourage lenders to try and do one thing additional helpful with their cash than park it with the ECB. it is also designed to assist weaken the monetary unit to produce some help to eurozone exporters, and, hopefully, spur costs reception by creating imports dearer. Higher state defrayal, meanwhile, is geared toward boosting economic activity, that when a decade of solely moderate growth is presently stall or maybe receding.

Impact On Economic:-

On the international front  global activity remains subdued.The manufacturing sector has been affected most strongly, in particular for capital and intermediate goods, as well as for durable consumption goods. Since these goods are highly tradable, their production is sensitive to developments in international trade.

Although the direct effects of individual tariff measures on economic activity are contained, prolonged uncertainty and therefore the prospect of associate step-up of trade disputes area unit indirectly poignant the planet economy by consideration on economic sentiment and international investment. Not solely area unit exponent measures a near-term air current for the planet economy, they'll conjointly produce to allocative distortions that have an effect on the extent of potential output and therefore the potential rate of productivity growth.