A number of members of the Board of Directors voted today in favor of the plan to increase the interest rates of the European Central Bank, presented on Monday by its President, Christine Lagarde. of the ECB
Lagarde wrote in the ECB blog that the deposit acceptance rate, which is currently negative (-0.5%), should start rising in July and could become zero or just above zero by the end of September. , while it is projected to increase further to its “neutral” level, which is estimated between 1% and 2%.
The Dutch central banker, Klaas Knott, who is one of the most conservative members of the Board. of the ECB, stated that it fully supports this plan. His Finnish counterpart, Olli Rehn, also voiced support for raising interest rates over the summer, as did ECB chief economist Philip Lane.
“I fully agree, I fully support everything that is said on the blog, I think it sets the course for politics well,” Knot told the World Economic Forum in Davos.
Last week, Klaas said there should be a possibility of raising the interest rate by 50 basis points (half a percentage point) in July, but with his statements today he supported a smaller increase, of the order of 25 bp, in line with Lagarde’s position for gradual increases.
Speaking in Helsinki, Rehn, who is considered by some to be a “dove” in favor of lower interest rates, said he supported interest rate hikes of 25 basis points. both in July and September.
Lane noted that Lagarde’s schedule for the summer was “clear and strong”, but stressed that any move after September would depend on the course of inflation and the impact of the war in Ukraine.
Yesterday, the central bankers of Austria and Latvia announced that the increase of interest rates by 50 bp. should be an option in July, implying that there is no agreement on a 25 bp increase.
ECB Executive Board member Fabio Panetta, a “pigeon” par excellence, took a slightly different view, arguing that normalizing monetary policy should not be equated with raising interest rates to a neutral level. Instead, he noted that the goal should be to stabilize inflation at the ECB’s 2% target.
Source: ΑΠΕ-ΜΠΕ
Source: Capital
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