- In recent years, France has been a net importer, consuming a large amount of imported goods and services. France’s top imports are machinery, vehicles, crude oil and aircrafts. Among services, the largest imports into France are transportation and travel services. Similar to exports, the majority of imports are from European countries, which account for 68% of total imports. France’s main import partners are Germany, Belgium, Italy and Spain. Outside of the European Union, France imports the most goods from China . France, as a member of the EU, follows the common EU weighted average tariff rate on selected imports.
France’s Monetary Policy - The Banque de France is the central bank of France and is responsible for the implementation of France’s monetary policy. Since 1999, France has followed the common monetary policy of the Eurozone set by the European Central Bank (ECB). The primary objective of the ECB’s monetary policy is to maintain price stability within the Eurozone. Today, the Banque de France is linked to the ECB and implements the interest rate policy set by the European System of Central Banks. The ECB is committed to keeping inflation below, but close to, 2% over the medium term. In order to achieve this goal, the ECB uses a set of monetary policy instruments including setting the key deposit rate and benchmark refinancing rate. Since the recent economic crisis, inflation has fallen below 1%, into the “danger zone”, causing the ECB to take unprecedented monetary policy actions. In 2014, the ECB cut the main refinancing rate to a record low of 0.15% and became the first major central bank to ever adopt a negative deposit rate. Formerly, unlike the Federal Reserve, the ECB did not typically buy bonds outright. Instead, the ECB used reverse transactions, repurchase agreements or collateralized loans, to manipulate the money supply. However, during the recent sovereign-debt crisis, the ECB purchased bonds issued by feeble Eurozone countries to stimulate liquidity.
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