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by nradov 2082 days ago
Price deflation is only of concern to debtors with fixed rate loans. For those with variable rate loans the rate will tend to drop during deflationary periods.
1 comments

I agree, if the lender makes cheaper credit available, and if borrowers are automatically provided with drops in their loan rates. If borrowers have to shop around for a better deal and pay fees in the process, this would dull the effect of a lower base rate.

Some other reasons that the ECB wishes to fight deflation are described here:

https://www.ecb.europa.eu/press/key/date/2016/html/sp160404....