ECB Officials Divided on Future Interest Rate Decisions

Heads within the European Central Bank (ECB) have different perspectives when they discuss the interest rate ahead. The quarrel that reveals itself has the potential to develop into disagreement at the next interest rate meeting.

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ECB Officials Divided on Future Interest Rate Decisions
Photo: Arne Dedert AP/TT

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The French central bank chief Francois Villeroy de Galhau emphasizes that it is not possible to rule out that another interest rate cut may be needed.

It is absolutely possible that there will be another interest rate cut at upcoming meetings, says Villeroy to the French radio channel BFM Business.

Two Baltic colleagues, Latvia's Martins Kazaks and Lithuania's Gediminas Simkus, are on the same track. At the same time, Finland's central bank chief Olli Rehn has said that the ECB must be ready to act quickly if needed.

But Christodoulos Patsalides, chief of the Central Bank of Cyprus, sees no need to stimulate the economy with more interest rate cuts.

The current interest rates are at a suitable level if inflation develops as expected. So, if nothing significant happens, there is no need to take any measures in the near future, says Patsalides.

The statements are made after the ECB, as expected, decided to leave the key interest rates unchanged, with the so-called deposit rate at 2 percent.

Inflation is where we want it to be, said ECB chief Christine Lagarde after the interest rate decision on Thursday.

However, she flagged unusually great uncertainty regarding the price development going forward due to the shaky situation regarding global trade.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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