ECB’s Holzmann: Initiated ‘Gradual Move Away from Negative Interest Rates’, Must Continue in 2022
30 December 2021
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Robert Holzmann on Thursday said that the ECB had in effect started the slow process of exiting from negative interest rates and that it would be crucial to continue this in 2022.
In a retrospective of 2021 released by the Austrian National Bank, which he heads, Holzmann said: ‘We have a very clear mandate as a central bank and that is to maintain price stability. If, as a result of a pandemic-related economic wave-like sequence of crises and recoveries, inflation settles in well above our target of 2%, then we have to act - and we have acted’, he said.
‘Starting with the decision on the ECB's first new monetary policy strategy in 18 years, to the decision to phase out the pandemic emergency purchase programme (PEPP) and initiate a gradual move away from negative interest rates, we have responded to the new realities in a correspondingly timely manner’, he continued.
‘In the new year, it will be crucial to gradually phase out negative interest rates and unconventional monetary policy and to avoid any proximity to monetary state financing’, he said.
Even though this year has been anything but easy, I remain an optimist’, he described himself. ‘We are watching the developments very closely. That is important, because with shorter event cycles, it is only possible to drive on sight. The greatest strength of monetary policy - its ability to act very quickly and adjust to new circumstances in a very short time - is especially in demand now and in the coming months.’
With reference to the US Federal Reserve chairmanship, Holzmann said he was ‘very pleased that such an experienced and prudent central banker as Jerome Powell has once again won the race in this extremely important position for the global economy.’