The European Central Bank (ECB) may reduce its deposit rate to 2% by summer, according to Francois Villeroy de Galhau, head of the Bank of France and an ECB Governing Council member.
In an interview with Alternatives Economiques, Villeroy stated that based on the current outlook, a 2% rate could be reached by mid-year.
He also reiterated that banking sector consolidation in Europe could enhance competitiveness on a global scale.
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Background to this is that on January 30, the ECB lowered its deposit rate by 25 basis points to 2.75%, with policymakers signaling another rate cut in March, as economic growth concerns outweigh inflation fears.