ECB’s Vasle: Let’s Get Away from Negative Interest Rates by Year’s End
4 April 2022
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Boštjan Vasle on Monday spoke out in favour of eliminating negative official borrowing costs by the end of 2022.
In an interview with Bloomberg, Vasle, who heads the Bank of Slovenia, said that the ECB must be ‘very careful’ to take timely action.
‘The most important thing for me is that we will start this process not very late in the year and have the opportunity to be out of negative territory by the turn of the year’, he was quoted as saying.
‘We’re still expecting quite strong positive growth rates, and if that scenario materialises I don’t see any reasons why we wouldn’t continue with policy normalization after the turn of the year and go above zero with interest rates’, he said.
Vasle called the ECB’s baseline HICP forecast for 2022 of 5.1% ‘still quite realistic’.
‘My expectation is that in a quarter or two we’ll see the peak of inflation and then a gradual easing by the end of the year’, he said. ‘The last inflation reading was indeed very high, but in the context of the conflict and the rising prices across various energy segments, it was something which wasn’t so unexpected.’