If oil prices moderate, as indicated by futures, inflation rates in the euro area will most likely fall below 2% in the course of 2003 and should remain at levels in line with price stability thereafter. Against this background, interest rates in the euro area have fallen to very low levels, both in nominal and real terms.
On the basis of currently available information, this policy stance, while contributing to the preservation of price stability over the medium term, somewhat counterbalances the multiple factors which currently have an adverse effect on economic activity. In the current environment of heightened uncertainty, stability has become an even more precious asset.