Consumer prices will probably rise by only 1.1% this year, and by 1.5% next year. This compares with an average increase of 1.8% in prices in Germany over the past ten years A further easing of our monetary policy was thus appropriate in view of a long-lasting phase of extremely low inflation.
What is important in this respect is that the reduction of the main refinancing rate is factored fully into rates on the money markets, in order to enable the monetary policy easing to full effect despite already very low interest rates. The negative interest rate we have put in place for banks’ deposits thus ensures that the interest rate corridor, i.e.