The European Central Bank will have to raise interest rates twice this year to avoid greater room for maneuver in the event that inflation exceeds forecasts, the board member said. of the bank, Robert Holzmann speaking to the Boersen Zeitung newspaper.
Holzmann said two base increases of 25 basis points at a time would boost the ECB’s future choices and help the bank avoid making further increases later.
“If at the end of the year” the deposit rate is not already at 0%, it will be too late, “he said. “If inflation does not turn out to be higher than expected, we can simply stay at 0%,” he added.
Holzmann, the governor of Austria’s central bank, is among a group of ECB officials who want more aggressive action to tackle inflation. The governor of the Dutch central bank, Klaas Knot, has also estimated that two interest rate hikes are possible this year, while the chairman of the German Bundesbank, Joachim Nagel, has stated that interest rate hikes should not be delayed.
The ECB kept interest rates unchanged at the last monetary policy meeting on March 10, with interest rates on major refinancing operations and interest rates on marginal lending and deposit facilities remaining at 0.00%, 0.25% and -0. , 50% respectively.
Source: Capital
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