ECB‘s Rehn: Interest Rate Cut Possible in June Amid Declining Inflation

19 April 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – As inflation continues to decline, an interest rate cut could be suitable in June, European Central Bank Governing Council member Olli Rehn said Friday.

In an interview with CNBC, Rehn, who heads the Bank of Finland, said, ‘Provided that inflation continues to converge towards our 2% target, then it is appropriate to ease the monetary stance and cut rates in June’.

According to Rehn, the geopolitical situation in the Middle East and in Ukraine posed the largest risk to further monetary policy developments.

‘So far the escalation has been avoided, and we’ve seen that the market reaction to the events was rather moderate, but there is still a certain risk of escalation’, he said.

Asked about further interest rate cuts after June, Rehn emphasised that the ECB would continue to follow a meeting-by-meeting approach and remain data-dependent.

‘In June we should be able to take this decision on easing the policy stance and cutting the rates. Beyond that we are not pre-committing ourselves to any rate path and it’s essential that we continue to take decisions meeting-by-meeting and depending on the incoming data’, he said.