ECB’s Villeroy: Will Maintain Rates at 4% as Long as It Takes

19 September 2023

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau late Monday said interest rates would remain at 4% as long as necessary to restore price stability.

In an interview published in daily French daily La Croix and posted on Tuesday to the website of the Banque de France, which he heads, Villeroy said that ‘we have passed the high point of total inflation, and that on food - which is the most significant for the French.’

‘But this is not enough, of course’, he continued. ‘We are committed to bringing inflation back towards the 2% objective by 2025, in France and in Europe. To cure this disease, we must know how to be tenacious about the remedy that is interest rates: we will therefore maintain those of the ECB at their current level of 4% for as long as it takes.’

It would be a ‘bad idea’ to raise the ECB’s inflation target to 4%, he said.