Euro Area Monetary Policy Shocks Ripple Through Eastern Europe Retail Rates
The study looked at how euro area monetary policy affects interest rates in countries that use the euro unofficially. They found that over a third of interest rates in these countries are influenced by euro area policies. Even if these countries have their own central banks, they can only partly control interest rates linked to the euro. Changes in euro area policies quickly impact interest rates in these countries, creating an additional way for international economic shocks to spread.