By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Gediminas Šimkus said on Tuesday that the ECB should remain composed and avoid reacting too hastily to developments in the Middle East.
In the Q&A session at the Baltic Economic Resilience panel organized by the Bank of Lithuania, which he heads, Šimkus said that the ECB would continue to take decisions on a meeting-by-meeting basis, guided by incoming data.
He highlighted the recent volatility in oil markets, noting that prices had swung by more than USD20 since Monday.
“So, if you start thinking about monetary policy in the morning, you may end up with a very different thinking in evening,” he said. “So, stay calm and think about things with cold brains.”
Šimkus also cautioned the ECB against “overreacting,” adding that the situation involving Iran could see significant developments over the course of the week.
“Of course, I'm aware of the change of the market perceptions, and of course if things would last, spread and go deeper, it will have implications not only on inflation, but also on the general economic situation not only in the Middle East region, but also wider for Europe.”
On next week’s monetary policy meeting, Šimkus said the ECB would assess the possible implications of developments in the Middle East for the European economy, but for the time being should “stay our course.”
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