ECB’s Centeno: Interest Rates Will Remain Higher Than They Were Pre-Covid

7 March 2025

ECB’s Centeno: Interest Rates Will Remain Higher Than They Were Pre-Covid
Mário Centeno, governor of the Banco de Portugal, at the ECB’s Governing Council meeting in Ljubljana on October 17, 2024. Photo by Adrian Petty/ECB.

By David Barwick – LISBON (Econostream) – European Central Bank Governing Council member Mário Centeno on Friday said that interest rates in the euro area would remain at levels above those of the pre-Covid era.

In remarks at an event of the Banco de Portugal, which he heads, Centeno said, ‘We are on course to normalise monetary policy.'

Nonetheless, he added, 'Interest rates will stay above what they used to be before Covid.'

While different people’s assessments would vary, the euro area was ‘getting out … of the woods’ in terms of inflation, he said.

The ECB had not only brought inflation down from its peak, but was ‘in the process to reach that [price stability] target in the medium term in a stable way, a sustained way.’

According to Centeno, profit margins in the region had been ‘accommodating the increase in real wages’.

In other comments, Centeno called the euro area ‘the most stable economy in the world’ and ‘the greatest suppliers of stability in the world’, and called for the completion of the banking union and the capital markets union.