ECB’s Centeno: Without Materialisation of Risks, Hiking Cycle Is Done

11 October 2023

By Isabel Teles – MARRAKECH, Morocco (Econostream) – European Central Bank Governing Council member Mário Centeno on Wednesday said that further interest rate hikes would be unlikely if no new shocks occurred.

In an interview with CNBC International TV during the 2023 annual meetings of the International Monetary Fund and the World Bank Group, Centeno said, 'Barring additional shocks, that we don’t see coming, of course, we will be done. That’s my interpretation of the decision in September.’

Recently risen oil prices did not justify further rate increases, he said. 'I don’t see that really materialising right now at a level that will imply a change in this' rate level, he said.

Asked if it was time to discuss PEPP reinvestments, Centeno said that inflation was the primary concern and that other mechanisms should be considered at the appropriate time.

‘So, if we start discussing these other instruments because they are in our toolkit and we need to of course adjust them over time, that would be very good news for all of us, because it means that we think inflation is in a good path towards our aim', he said. 'And so, at that point - but to me, honestly, it will be only at that point - we should and we need to start debating the other instruments and adjusting them so that we create space in our balance sheet.'

'We need to reduce the balance sheet, that’s for sure', he said. 'When and by how much, it will depend on our evaluation on the success that we are having in terms of inflation…'