Rehn (ECB) in favor of a rate hike in July | Photo credits: © European Union, 2014
HELSINKI, May 5 (Reuters) – The European Central Bank (ECB) is expected to raise its deposit rate, currently set at -0.5%, by a quarter point in July, said Olli Rehn, one of the members of the institution’s board of governors.
“In my opinion, it would be reasonable to increase the deposit rate by 0.25 percentage points in July and by the fall to bring it to zero. After that, we could continue to further normalize monetary policy progressively and proactively,” he told Finnish daily Helsingin Sanomat in an interview published on Thursday.
Inflation in the euro zone reached 7.5% year on year in March, its highest level since the creation of the single currency, leading several ECB officials to plead for a faster end to the purchase program. central bank bonds, a prelude to a rate hike. (Report Anne Kauranen; French version Claude Chendjou, edited by Sophie Louet)