FRANKFURT (Reuters) – The current level of interest rates at the European Central Bank (ECB) should help bring inflation down to 2% over time, but rate cuts cannot be ruled out at some point, said Pablo Hernandez de Cos, member of the ECB Governing Council, in an interview published on Friday.
“Based on the information available today and using a range of analytical tools, we can say that the level of interest rates we have reached, if sustained for a sufficiently long period, is broadly consistent with the achievement of our medium-term inflation target,” Pablo Hernandez de Cos told German financial daily Börsen-Zeitung.
“Given the information we have today, we certainly cannot rule out rate cuts. But I do not want to and cannot confirm them either,” he added.
The Spanish central bank governor also said the ECB “should be very careful” about completely stopping its Pandemic Emergency Purchase Program (PEPP) and should not consider sell its bond securities.
The governor added that he did not see any “obvious” benefits in increasing the reserve requirements of European banks.
(Written by Francesco Canepa, French version Corentin Chappron, edited by Blandine Hénault)
©2023 Thomson Reuters, all rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. “Reuters” and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.