He takes the rise of 0.5 points in March for granted and is confident that inflation will moderate from now on due to base effects
MADRID, 2 Mar. (EUROPA PRESS) -
The president of the European Central Bank (ECB), Christine Lagarde, has reiterated that "it is very likely" that interest rates in the euro area will rise another 50 basis points in March, while she has ruled out any drop in the price of money before the inflation has stabilized in line with the 2% target, something that is not expected to happen before 2025, warning that the rate will not return to the negative level of past years.
"Interest rates will not return to where they were a few years ago," the Frenchwoman assured in an interview with Antena3's 'Espejo Público', noting that the institution's projections suggest that inflation in the euro area will return to the target of stability of 2% "in 2025".
While Lagarde has noted that "rates will not stay high forever," she has warned that only when the euro region's inflation rate has stabilized in line with the 2% target, "then rates can be lowered." ".
In this sense, the central banker has defended the importance of making sure that the objective of returning inflation to the level of price stability is met in a solid way to avoid lowering rates and having to raise them again. "That's what we don't want," she said.
In any case, the president of the ECB has reiterated in view of the meeting of the Governing Council on March 16 that "it is very likely" that a 50 basis point rise in interest rates will be decided, since it does not exist in At this time, there is no reason to think that it will not be so.
Also noting the ECB's reliance on incoming data, Lagarde has indicated that the institution may continue to raise the price of money. "We will do whatever is necessary for inflation to return to 2%," he summarized.
On this issue, despite acknowledging that there was a rise in prices in February after three months of reduction in the inflation rate, which suggests that the decreases were not stable, although they showed a trend, the French company has brought forward its expectation that in March there will be "a further reduction due to base effects", since energy prices rose substantially a year ago after the start of the invasion of Ukraine.
In this way, it has underlined the ECB's certainty that prices will continue to fall, although the inflation rate will still remain too high. "It will take time to reduce inflation," she acknowledged.
