The president of the European Central Bank (ECB), Christine Lagarde, said this Tuesday in Berlin that given the magnitude of the interest rate increases so far, there will be some time to see their effect on the economy.
“Given the magnitude of our monetary adjustment, we can now give it some time to develop,” Lagarde said, speaking about inflation and democracy, at an event organized by the German Finance Ministry.
Lagarde considered, however, that “it is not yet time to declare victory,” despite the decline in inflation in the euro zone.
“We can act again if we see that there are increasing risks of not reaching our inflation target” of 2% in the medium term, warned the president of the ECB.
“We are in a phase (…) that I would describe as vigilant and concentrated,” added Lagarde, admitting that inflation “has decreased considerably” in the euro zone.
The ECB left interest rates unchanged at its last monetary policy meeting in October, after 10 consecutive increases to curb the high rate of inflation.
Although inflation fell to 2.9% in the euro area in October, a figure now closer to the ECB’s target, the president of the institution stated that interest rate cuts are not expected soon.
The current level of rates “maintained for a long enough time will help bring inflation to our target at the desired time,” he said.
“The journey is not over yet and we have to finish it,” Lagarde said.
Source: TSF
