By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Primož Dolenc said Wednesday that ECB interest rates were currently set at a level that left policymakers room to respond as the economic and inflation outlook evolved.

At a Banka Slovenije press conference in Ljubljana, the Slovenian central bank governor said subsequent decisions would be shaped by developments in inflation expectations and the associated balance of risks.

“We assess that the current interest rate level has sufficient flexibility to respond to subsequent changes in circumstances,” Dolenc said.

He identified geopolitics and costly energy as factors continuing to cloud the inflation picture.

“Geostrategic risks and high energy prices remain important sources of uncertainty, which is reflected in persistent inflationary pressures,” Dolenc said.

Dolenc also said fiscal policy lay outside the ECB’s remit.