ECB’s Centeno: Monetary Policy Will Have Time to React
28 December 2021
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Mario Centeno on Tuesday said in the context of elevated inflation that ECB monetary policy would have time to react.
In an interview with Portuguese weekly news magazine Sábado, Centeno, who heads Banco de Portugal, was asked what could cause the ECB to leave its current wait-and-see mode.
‘We are taking the signs of the inflation rate very seriously, but we are also aware that many of the factors that justify this price increase are associated with the pandemic’, he said. ‘Therefore, we have to wait and be patient, central banks are one of the few economic agents that can be very patient to allow the whole pandemic process to stabilise and normalise the economy.’
‘But we are not going to do it idly and, therefore, we are going to adapt the pace of purchases [of debt] to the new reality’, he continued. ‘We already did this at the December meeting and we will continue to do so. All institutions have an inverted U-shaped inflation forecast, peaking in late 2021 and early 2022, with a more or less slow deceleration throughout 2022. We will have time to react.’