ECB’s Kazāks: Interest Rates Should Be Cut Gradually and With Caution

20 May 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – The process of reducing interest rates should be cautious and gradual, European Central Bank Governing Council member Mārtiņš Kazāks said Monday.

In an interview with Bloomberg, Kazāks, who heads the Bank of Latvia, said, ‘The baseline scenario shows that we are gradually approaching our 2% target, which will of course mean gradually we can also start reducing the rates. This process needs to be cautious, gradual and we should not rush.’

The possibility that interest rates would be cut in June was high, but more data was needed going forward after June, he said.

‘Given still high uncertainty, very clear forward guidance is not a good policy solution at the moment’, he said.