ECB’s Šimkus: More Rate Cuts Possible if Inflation Continues to Reach Target

11 June 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – More interest rate cuts can be expected as long as inflation continues to descend towards target, European Central Bank Governing Council member Gediminas Šimkus said Tuesday.

At a press conference in Vilnius, Šimkus, who heads the Bank of Lithuania, said, ‘When we are sure that inflation is reaching the target, interest rates could be reduced further’.

According to Šimkus, even though the decision last Thursday to reduce interest rates marked significant progress, the fight against inflation was not over.

‘It is still premature to raise the flag of victory’, he said, noting that inflation tends to rise when monetary policy is eased too soon. ‘That’s why even after this interest rate cut, monetary policy will remain restrictive for a while’.