ECB’s Šimkus: Don’t See a Reason to Remain at 2.25%

26 April 2025

ECB’s Šimkus: Don’t See a Reason to Remain at 2.25%
Gediminas Šimkus, governor of the Bank of Lithuania, at the European Central Bank Forum on Central Banking in Sintra, Portugal on July 2, 2024. Photo by the ECB under CC BY-NC-ND 2.0.

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Gediminas Šimkus on Saturday said there was no reason for 2.25% to be the terminal rate of the ECB’s policy easing.

In an interview with Bloomberg, Šimkus, who heads the Bank of Lithuania, said, ‘Within the current economic context, I don’t see a reason to stay [at 2.25%].’

‘With data at hand, I can’t exclude two more cuts to come this year’, he said. ‘But in order to go further, we’d need to see more negative surprises.’

Monetary authorities do not ‘need to wait until the end of the 90-day period of partial tariff reprieve to take our next decision’, according to Šimkus. ‘Even if the talks with the US result in deals with some countries, it won’t change the reality we now face, which is continued policy uncertainty that’s already having negative consequences.’

Šimkus told the news agency that policymakers had been ‘a bit overly optimistic on how the economy would develop and disinflationary pressures are building up’, and pointed to ‘clearly moderating wage growth … an appreciating euro, the disinflationary impact of tariffs, the risk of Chinese goods being diverted to Europe.’