ECB’s Kažimír: Could Loosen Monetary Policy, But No Post-June Pre-Commitments

15 April 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – European Central Bank monetary policy could be eased in light of changed circumstances, but gradually and with no promises regarding what happens after June, European Central Bank Governing Council member Peter Kažimír said Monday. 

In a statement issued on the website of the National Bank of Slovakia, which he heads, Kažimír said that inflation was apparently declining sustainably, and that the slower pace of disinflation going forward did not change the fact that 'we’re heading in the desired direction.' 

'This promising development heralds an imminent shift in the economic landscape', he said. 'A shift, that opens the door for the first rate cut in nearly five years.'

Monetary policy could be 'gradually relaxed' and needed to stay restrictive even after easing had started, given the susceptibility of the world to shocks such as a resurgence of inflation, economic weakness or changes in consumer preferences, he said.

While he considered June 'an opportunity to recalibrate our approach', Kažimír made clear that flexibility was essential and no promises could be made.

'The notion of easing doesn’t imply a commitment to specific future cuts but rather an openness to respond in kind, should the economic data advocate for it', he said. 'Let’s be clear: we are not pre-committing to a definite path post-June.'