By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Primož Dolenc said Thursday that the current level of ECB interest rates gave policymakers sufficient flexibility to respond to developments, with future decisions continuing to depend on the inflation outlook, risks and the effects of monetary policy.

Dolenc, acting governor of the Bank of Slovenia, said in a statement accompanying the International Monetary Fund and World Bank annual meetings that the 2.5% deposit rate “allows us appropriate flexibility to respond to further developments.”

“Our objective remains to stabilize inflation at 2% over the medium term,” he said, adding that the Governing Council would decide on any further measures “at each meeting individually.”

Dolenc said euro area inflation remained above target mainly because of persistent energy prices, while underlying inflation pressures had so far been relatively limited.

He said economic developments in Europe had nevertheless exceeded expectations, helped by progress in diversifying energy supplies, joint European measures and appropriate macroeconomic policy responses.

For Slovenia, Dolenc said current indicators pointed to stronger-than-expected growth alongside persistent domestic inflation pressures, particularly from wages and services, while risks from higher energy and food prices had re-emerged.