Finland’s central bank governor Olli Rehn has said in a statement released by German media today that the European Central Bank (ECB) will raise its benchmark interest rates in July, as the eurozone has seen a dramatic rise in population. .
“We need to avoid raising inflationary expectations,” he said in an interview with Die Welt, referring specifically to the Russian invasion of Ukraine.
“It is therefore important that we send a message in this direction. I agree to raise the reference rates in the third quarter, possibly in July,” he added.
Inflation reached an all-time high of 7.4% in March on an annual basis, well above the ECB’s target of around 2% in the medium term.
The development is expected to push Europe’s central credit institution to raise its benchmark interest rates, as other central banks have already done or announced, experts say.
It is expected to decide depending on the course of the war in Ukraine.
The increase in reference rates, which would be the first since 2011, would be a major step in the process of smoothing out the monetary easing adopted by the crisis, especially that of the new coronavirus pandemic from 2020.
“In my opinion, raising interest rates is possible in July,” said Isabelle Schnabel, a member of the ECB’s executive board, in the German financial press on Tuesday.
Source: AMPE
Source: Capital
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