Anita Angelovska Bezhoska: Lingering low interest rate environment and monetary accommodation in the euro area - impact on the region?

Platform for discussion by Ms Anita Angelovska Bezhoska, Vice-Governor of the National Bank of the Republic of Macedonia, at the Bank for International Settlements Meeting of the Working Party on Monetary Policy in Central and Eastern Europe, Budapest, 9-10 February 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

A decade after the global crisis outburst, withdrawal of the ECB unprecedented monetary stimulus seems distant. The low interest rate environment, breaking of the nominal zero lower bound frontier and the enormous balance sheet of the central bank, linger on, being a reflection of the economic malaise and low inflation. Decisive standard and non-standard monetary policy2 action supported the impaired financial markets and impacted the terms of financing and hence the recovery of the Euro Area economy. Yet, the growth agenda is to be completed, as healthy expansion is still not achieved and balance sheet crisis in the Euro zone is still present. Albeit for solving the growth puzzle a larger focus on structural policies and productivity growth is called, it is more than obvious that accommodative monetary stance of the ECB will persist in the forthcoming period, as a tool for growth support and for closing the gap between the current inflation and the medium term inflation target.