ECB’s Vasle: To Hike Rates Until Sufficiently Restrictive to Restore Price Stability
16 December 2022
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Boštjan Vasle on Friday said that the ECB would hike interest rates until they were sufficiently restrictive to restore price stability.
In a statement posted to the website of the Bank of Slovenia, which he heads, Vasle said that ‘[g]iven the significantly elevated inflation forecasts, we expect to raise interest rates further before they reach levels that are restrictive enough to return inflation to the target level of 2% in the medium term as soon as possible.’
The ECB’s holdings under the asset purchase programme would be reduced ‘in a gradual and predictable manner’, he said. After reducing it by an average of €15 billion per month in the months up to the end of 2Q, the ECB would ‘determine the further dynamics of the tapering in order to ensure continued consistency with the overall monetary policy strategy and stance, to preserve market functioning and to continue to keep short-term money market conditions firmly under control.’