Our forward guidance has extended the horizon over which investors operating in the short end of the money market expect monetary policy to remain very accommodative – in tune with the fragile conditions of the economic recovery. This explains why the reduction in the rate on our main refinancing operations has determined a material shift in the entire term structure of money market rates.
We trust these lower rates will be transmitted by banks and financial operators to the rates on mortgages and lines of credit for retail borrowers. Under guidance communication, we have been expressing our conditional expectation that the policy rates will remain at current or even lower levels in the future for an extended period of time.