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Foreign Central Banks

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On May 11, the European Central Bank (ECB) cut its main refinancing rate target 25 basis points (bp) to 4.5%. It was the last major central bank to respond to the current global economic slowdown. The move came while the M3 monetary aggregate was slightly above its 4.5% target. The ECB noted, however, that M3 growth “has been on a gradual downward trend since spring 2000,” and M3 growth now is distorted upward by non-euro-area residents’ holdings. Measured inflation also is above target, but the ECB explained that “upward risks to price stability over the medium term have diminished somewhat,” a view “supported by all forecasts.”


Suggested citation: "Foreign Central Banks," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-06, pp. 18, 06.01.2001.

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