Banks expect interest rates to fall

According to leading financial analysts from 18 banks, which were interviewed in the course of the “ZEW-Prognosetest“ by the Centre for European Economic Research (ZEW), interest rates in the Eurozone will slightly fall over the months to come. With regard to short-term interest rates (3-months-Euribor) experts forecast an average decrease by 36 basic points to 4.40% by March 2008.

As regards long-term interest rates, the same experts predict interest rates to fall by 17 basic points to 4.17%. On a six-months basis analysts expect short-term and long-term interest rates to fall to 4.22% and 4.23% respectively.

With regard to the US dollar/Euro exchange rate only minor changes are expected by analysts. For March 2008 the banks interviewed expect an average exchange rate of 1.472 US dollar per Euro. On a six-months basis they forecast the exchange rate to fall slightly to 1.44 US dollar per Euro.

An overview of all predictions made so far is available online. GERMAN