ECB‘s Šimkus: Evolving Policy Tools Unlikely to Alter Central Banks' Stability Mandat

21 June 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – While monetary policy tools have been adapting and changing, the mandate of central banks to ensure price stability remains the same, European Central Bank Governing Council member Gediminas Šimkus said Friday.

Speaking at a panel discussion in Kyiv, Šimkus, who heads the Bank of Lithuania, said, ‘I don't think that monetary policy is stepping away from orthodoxy. Yes, we have monetary policy tools adapting and changing. But the mandate is not changing. What changes is the label, the context in which we operate. What has not changed is the core, the reason why we are here.’

Supply shocks were likely to become more frequent during times of geopolitical tensions, supply disruptions and climate change, he said, adding that this could lead to higher inflation, volatility and uncertainty, complicating the goal of price stability.

‘We will have to evolve our monetary strategy and tactics, but even under the heightened uncertainty, volatile environment, huge supply shocks, geopolitical escalations, we would remain purely focused on our mandate to deliver price stability’, Šimkus said