Helsinki, May 5 (Prensa Latina) The European Central Bank may bring forward the first hike in its bank deposit rates in the euro zone to next July, one of the members of the Governing Council of that organization said today.
According to current Bank of Finland governor Olli Rehn, the ECB should hike interest rates by 0.25 percentage points to bring them to zero by the autumn.
In an interview with the Finnish daily Helsingin Sanomat, he added that the interest rate is currently -0.50 percent and “there is no reason to delay monetary tightening”.
After that, “we could continue to normalize monetary policy gradually and proactively,” said the Finnish official, who served as EU commissioner for economic and monetary affairs.
In his view, inflation forecasts in the euro zone are very different from those in the United States, where the US Federal Reserve raised its federal funds rate by 0.5 percentage point on Wednesday.
The Governing Council is expected to meet again on June 9th to discuss its monetary policy and at the same time publish its macroeconomic projections. Then they meet again on July 21st.
Voices in the ECB Governing Council have increased following recent statements by the President of the Banking Association, Christine Lagarde, and her Vice-President, Luis de Guindos, on the possibility of making this change in monetary policy effective.
According to the European statistics office Eurostat, the inflation rate in the euro zone was at a record high of 7.5 percent year-on-year in April.
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