The European Central Bank (ECB) can bring inflation back to its price stability target by keeping interest rates at an adequate level for long enough rather than raising them further, Council member Ignazio Visco said on Wednesday.
Speaking at the Italian Banking Association’s (ABI) annual general meeting, Visco said rates had already reached a restrictive level.
This means that carefully determining the duration of the monetary tightening, rather than adopting further hikes, would have the advantage of allowing the ECB to assess the impacts of its hikes so far, the Italian central bank governor said.
The ECB has hiked rates at each of its meetings over the past year, taking the deposit rate to 3.5% and has promised further tightening as it tries to contain inflation still three times higher than its 2% target.
Source: Terra
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