Lisbon/Rome, June 19, 2024 – European Central Bank (ECB) Governing Council member and Bank of Portugal Governor Mario Centeno has indicated that the central bank could lower interest rates again if inflation in the eurozone continues to decline.
Speaking to Portuguese lawmakers on Wednesday, Centeno stressed that further monetary policy easing by the ECB is realistic if inflation trends favorably. However, he also cautioned against hasty steps and emphasized the need for careful analysis of available data.
“The ECB will not rush to follow up on the first interest rate cut from June 2024,” Centeno said. “We are more likely to see a second cut in September, when updated quarterly economic forecasts will be available.”
In line with statements by ECB Vice President Luis de Guindos and Dutch central bank governor Klaas Knot, Centeno also highlighted the key role of macroeconomic indicators in interest rate decisions.
He also commented on the future of ECB monetary policy, ruling out a return to the ultra-accommodative stance of the pre-inflation era. “Ideally, interest rates would settle around 2%,” Centeno said. “Such a scenario would bring stability to the European and Portuguese economies.”
Additional Information:
- Current ECB interest rate: 4.50%
- Eurozone inflation in May 2024: 8.1% (vs. ECB target of 2%)
- Expected release of ECB quarterly economic forecasts: September 2024
Sources:
