Central Bank Governor Rehn underscores the importance of ECB's continued vigilance towards inflation.
In Helsinki and Paris - Olli Rehn Warns ECB Against Complacency on Low Inflation
In a candid press conference, Finland's Central Bank Governor Olli Rehn emphasized the European Central Bank (ECB) mustn't get too comfortable with low inflation. He stated the ECB should maintain a vigilant eye on risks, particularly inflation rates lingering far below the bank's target of 2%.
Thursday's ECB meeting saw another interest rate cut, marking the seventh time in a row. The deposit rate, used to guide monetary policy, was reduced by 0.25% to 2.00%. Inflation dropped to 1.9% in May from 2.2% in April, well below the ECB's ideal 2% for the economy's medium-term health.
François Villeroy de Galhau, the central bank governor of France, backed Rehn's stance. Both serve on the ECB's governing council, which sets interest rates. Villeroy de Galhau mentioned the ECB would react suitably to current data, given the high uncertainties. Echoing Rehn's sentiments, he added that they'd remain pragmatic with the data, staying flexible as needed.
(Reporting by Essi Lehto and Leigh Thomas, editing by Myria Mildenberger. For queries, contact our newsroom at [email protected] for politics and economics or [email protected] for companies and markets.)
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Business and finance remain critical areas of concern for the European Central Bank (ECB), as evidenced by the repeated interest rate cuts and the focus on maintaining inflation rates close to their target of 2%. This was reaffirmed by statements from Finnish Central Bank Governor Olli Rehn and his French counterpart, François Villeroy de Galhau, who both stressed the need for the ECB to stay vigilant and pragmatic in response to current data.
