FRANKFURT (Reuters) – Raising the European Central Bank’s (ECB) policy rate now would fail to stem record high inflation in the euro zone and would only hurt the economy, the president said. of the ECB, Christine Lagarde, in an interview published on Friday.
While it shook the markets last week by not ruling out the possibility of an ECB rate hike this year – which would be the first in more than a decade – due to persistent inflationary pressures, Christine Lagarde warned that a rate hike would not respond to rising oil prices and problems in supply chains, which have fueled inflation.
“It would not solve any of the current problems. On the contrary: if we act too hastily now, the rebound of our economies could be considerably weakened, and jobs would be threatened,” she told the German media group Redaktionsnetzwerk. Deutschland (RND).
She underlined that the ECB would modify its ultra-accommodating monetary policy gradually and when conditions allowed.
“We can now adjust – calmly, step by step – our monetary policy instruments. And when the economic data allow it, we will do so,” said Christine Lagarde.
(Report Francesco Canepa; French version Jean Terzian)