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French central bank recommends cut in popular savings account interest rate

The French central bank has recommended a reduction in the interest rate for the popular Livret A savings account from 3% to 2% starting in 2025. This adjustment aims to balance the interests of savers with the need to keep financing costs low for social housing, which benefits from the funds deposited in these accounts. The decision comes after a period where the rate was increased to 3% in February 2023, following a significant rise in inflation. The recommendation, which still requires approval from the French finance minister, reflects the central bank's strategy to manage economic pressures while supporting sectors like social housing. The rate cut is also influenced by a formula that considers inflation and short-term market rates, although the bank has the discretion to deviate from this formula for economic stability reasons.

Read the Full Reuters Article at:
[ https://www.reuters.com/business/finance/french-central-bank-recommends-cut-popular-savings-account-interest-rate-2025-01-15/ ]