ECB’s Šimkus: Room Remains for June Rate Cut, Risks of Undershooting Increased

26 May 2025

ECB’s Šimkus: Room Remains for June Rate Cut, Risks of Undershooting Increased
Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania, at the European Central Bank Forum on Central Banking, 27 June 2023 in Sintra, Portugal. © Sérgio Garcia/Your Image for ECB

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Gediminas Šimkus said on Monday that there was room for an interest-rate cut in June and there was an increasing risk of undershooting the inflation target.

In a remarks to reporters in Vilnius, Šimkus, who heads the Bank of Lithuania, said, ‘I see scope for an interest rate reduction’ next month.

‘The risks that inflation will be below the objective in the future have increased’, he added.

Risks were tilted to the downside with respect to inflation because of trade tensions and the higher exchange rate, he said.

Rates were now at the upper end of neutral territory, according to Šimkus.

 

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