The ECB’s decision to speed up interest rate hikes -75 basis points last Thursday- was “very important” but, from now on, Mário Centeno maintains that the central bank must prioritize “predictability” and, above all, , avoid haste and “advance in small steps”, in a context of uncertainty.
“The worst thing that can happen is to form the perception that the authorities are going back and forth in their decisions, just chasing the data,” says Mário Centeno in an interview with the Bloomberg agency. The statements were made in Prague, the capital of the Czech Republic, one day after the European Central Bank (ECB) announced the largest interest rate hike in its history and indicated that the coming months will bring more increases.
Centeno stressed that the increase announced this Thursday, as well as the 50 basis point increase decided in July, were two decisions that fit in with the ECB’s desire to anticipate the effort to raise interest rates – the so-called “front loading“, that is to say, a concentration of ascents, more intense, at the beginning of the process, instead of a more gradual and prolonged approach in time.
“This just means that we are moving faster than we had imagined in June or July. It does not mean that we are anticipating that the point of arrival will be higher”, that is, Centeno argues that the fact that the ECB is raising interest rates faster does not mean that, at the end of this increase process, levels will be reached. Taller. than previously anticipated.
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Source: Observadora
