ECB’s Centeno: Monetary Policy to Remain Tight Even After Some Easing

17 April 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Mário Centeno on Wednesday said that the ECB’s monetary policy would still be tight even after easing began.

In an interview with Reuters on the margins of the spring meetings of the International Monetary Fund and World Bank, Centeno, who heads Banco de Portugal, said, ‘Even after 25 or 50bp of cuts we’ll still have a tight monetary policy stance.’

It was ‘very likely’ that interest rates would be cut in June, he said, noting that new data on unemployment and growth would be available.

‘I don’t know anybody who says the neutral rate is above 3%’, he said, commenting on how far the ECB could reduce interest rates.

The ECB needed to conduct its monetary policy for the euro area, he said.

‘If that means we need to cut interest rates before the United States, so be it’, he said. ‘The number of times we cut will depend on the numbers that come in.’