The Governor of the Central Bank of Finland Olli Rehn advocates Monday in the German press an increase by the European Central Bank (ECB) interest rates from July while the euro area is subject to high inflation.
We must prevent inflationary expectations from hardening, stressed this member of the ECB’s Governing Council in an interview with Die Welt, referring in particular to the Russian invasion of Ukraine.
It is therefore important to send a signal in this direction. The policy rate should be raised in the third quarter, probably in July, he added.
In the euro zone, inflation reached a historic level of 7.4% over one year in March, well above the medium-term target of 2% set by the ECB.
This should push the institution to raise its rates, the image of what its large counterparts have already begun to do, experts believe.
The guardians of the euro should mainly decide according to the evolution of the war in Ukraine.
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A rate hike, which would be the first since 2011, will be a major step in the ongoing process of normalizing the accommodative monetary policy carried out in response to the crises, in particular that linked to Covid-19 from 2020.
A rate increase is my opinion possible in July, has already supported Isabel Schnabel, member of the executive board of the ECB, last Tuesday in the German economic press.