European Central Bank (ECB) Vice President Luis de Guindos predicted this Wednesday (22) that inflation in the euro zone will remain close to the current record level in the coming months and begin to decelerate after the European summer. .
Guindos, who spoke at a virtual event organized by the Universidad Internacional Menéndez Pelayo in partnership with the Association of Journalists of Economic Information, also said that the size of the rate hike to be implemented by the ECB in September will depend on inflation expectations.
At this month’s policy meeting, the ECB said it planned to raise interest rates by 25 basis points in July and signaled a 50 basis point hike for September.
Guindos also commented that the ECB is accelerating the process to establish an instrument against fragmentation, as the divergence in borrowing costs of eurozone countries is known. According to him, fragmentation is a significant concern for the ECB.
The official said that the ECB’s board of directors has not yet discussed details of the new instrument, but stressed that the tool will be different from asset purchase programs, such as PEPP or APP, or the so-called Complete Monetary Operations program (OMT, for the acronym in English).
Source: CNN Brasil
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