BERLIN, May 22 (Reuters) - An interest rate cut by the European Central Bank would have little impact on the German economy or the euro’s strength in foreign exchange markets, the head of the Federation of German Industry (BDI) lobby, Ulrich Grillo, said on Thursday.
“I don’t think there would be any big impact more on the issue of whether the German economy would profit substantially if interest rates, that have already been at historic lows for a long time, were lowered further,” Grillo said.
“I don’t think that a further rate cut from 0.25 percent to 0.15 percent or even to 0 percent would open up anything further,” said Grillo. “What’s important is that we don’t have any deflationary trends emerging. But I don’t see that as the biggest risk out there.”
He added: “I also don’t think any substantial change in interest rates would have any impact on the euro’s exchange rate.”
Reporting by Annika Breidthardt, writing by Stephen Brown and Erik Kirschbaum