Kazimir, the ECB’s Slovak ‘hawk’, sees "preferable" raise interest rates at next week’s meeting and not wait for October

by archynewsycom
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There is a week left for the European Central Bank (ECB) to decide whether to finally pause the monetary escalation that it has been undertaking since July 2022, after nine consecutive rises in interest rates, and each of its members continues to position itself. This time it has been the current governor of the Central Bank of Slovakia and member of the Governing Council of the ECB, Peter Kazimir, a recognized hawk in the institution and, therefore, in favor of following a more aggressive policy.

According to the agency Bloomberg, Kazimir believes that the Central Bank should make one more interest rate hike, of another 0.25 basis points, and the sooner the better. “Prevention is better than cure,” says Kazimir in an opinion article to which the financial newspaper has had access. In his opinion, the Frankfurt-based body needs to raise money rates again in the Eurozone in order to ensure that inflation returns to 2%, which is the ECB’s sole mandate. The latest data available reflected a stagnation in prices, with a Community CPI at 5.3%, which has reduced the rate of decline, anchored in this figure.

Kazimir believes that the opportunity to raise rates at the meeting to be held on September 14 must be seized. “It is a simpler and more efficient solution (…) The markets receive a clearer indication of what the terminal rate will be [allá donde toquen techo los tipos] and we have more time to assess whether inflation is on a sustainable downward trajectory toward our target.”

For Kazimir, “inflation remains stubbornly high and inflation expectations remain well above our 2% target.” It is, to date, one of the clearest opinions expressed by the members of the Governing Council. The market does not agree with him, since the forecasts suggest that this increase will take place in October, and not in September.

Currently, interest rates in the euro zone are at levels of 4.25% and the deposit rate at 3.75%, levels not seen since 2008.

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