Cyprus Mail
Banking and FinanceBusinessEurope

ECB ‘crystal clear’ on June rate cut, de Guindos says

European Central Bank (ECB) Vice-President Luis de Guindos attends a news conference following the ECB's monetary policy meeting in Frankfurt, Germany December 15, 2022. REUTERS/Wolfgang Rattay/File Photo
European Central Bank (ECB) Vice-President Luis de Guindos attends a news conference following the ECB's monetary policy meeting in Frankfurt, Germany December 15, 2022. REUTERS/Wolfgang Rattay/File Photo

The European Central Bank has made it “crystal clear” that interest rates could be cut in June but has also been firm that policy decisions beyond that remain up in the air, ECB Vice President Luis de Guindos said this week.

The ECB put a June rate cut on the table last week and has spent the past week reinforcing that guidance, despite rising oil prices, a weaker euro and bets that its biggest peer, the US Federal Reserve, would delay its own rate cuts.

“I think that we have been crystal clear: if things continue as they have been evolving lately, in June we’ll be ready to reduce the restriction of our monetary policy stance,” de Guindos told a parliamentary hearing in Brussels.

De Guindos repeated the ECB’s most recent guidance, that inflation, at 2.4 per cent in March, would hover near its current level over the coming months but would ease back to the ECB’s 2 per cent target next year.

Markets currently see 75 basis points of cuts in the central bank’s 4 per cent deposit rate this year, or two full moves beyond June, but de Guindos declined to be drawn on where rates are likely to go, even if some policymakers have already floated the idea of a second move in July.

“I would say that there are some risks,” de Guindos said. “The evolution of wages, productivity, unit labour cost, profit margins, and geopolitical risks are very difficult to take into consideration and to bear in mind when we elaborate our positions.”

Follow the Cyprus Mail on Google News

Related Posts

Cyprus tourism on track to meet targets, minister says, after second-best April

Kyriacos Nicolaou

How to inspect secondhand farm machinery

CM Guest Columnist

Cyprus tourist arrivals up 1.7 per cent in first four months of 2024

Souzana Psara

Construction material prices fall from previous year

Souzana Psara

SSM Chair praises Cypriot banks’ capitalisation and NPL reduction

Kyriacos Nicolaou

Vatican urges caution over weeping Madonnas and other supposed apparitions