ECB’s Centeno: May Have to Go Below Neutral Rate

21 May 2025

ECB’s Centeno: May Have to Go Below Neutral Rate
Mário Centeno, Governor of the Banco de Portugal, at the European Central Bank Forum on Central Banking in Sintra, Portugal, on June 28, 2023. Photo by Sérgio Garcia/Your Image for ECB under CC BY-NC-ND 2.0.

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Mário Centeno said on Wednesday that the ECB could need to cut interest rates below what he considered to be the neutral rate.

In a press conference about the 2024 annual report of the Banco de Portugal, which he heads, Centeno said that rates ‘may have to go below the neutral rate’, which he estimated to be between 1.5% and 2%.

‘The ECB is paying great attention to all these balances and we cannot run the risk of having a monetary policy that puts inflation at a negative value’, he said.

Asked about his chances of reappointment after the Portuguese elections, Centeno did not wish to comment, according to national media.

‘There is a clear institutional framework, what is at stake is the assessment of my performance as governor and fortunately it is not me who is doing that’, he said.

 

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