Italy Central Bank President Panetta: ECB is to cut interest rates

Italy Central Bank President Fabio Panetta said that the downward trend in inflation makes a rate cut possible.

Panetta, speaking at an event in Rome, made an assessment of when the European Central Bank (ECB) would start the interest rate reduction cycle.

Also a member of the ECB Governing Council, Panetta stated that inflation in the Eurozone is moving towards the ECB’s target of 2%, which makes a rate cut possible.

Panetta said, “The consensus emerging within the ECB Governing Council, especially in the last few weeks, points in this direction.”

Meanwhile, the central bank presidents of Germany, the Netherlands, Slovakia, Spain, Ireland, and Greece had indicated June for a rate cut.

Since July 2022, the ECB had raised interest rates by a total of 450 basis points over 10 consecutive meetings. The Bank raised the deposit rate to 4% at its September 2023 meeting and made no changes in its October, December, and January meetings.

European Central Bank President Christine Lagarde stated on March 20 that the Bank will likely have sufficient assurance to decide on its first interest rate cut in June 2024, saying, “We cannot commit in advance to the path interest rates will take after the first rate cut.”

The European Central Bank will meet to set interest rates on April 11 and June 6.”

source: prepared by Melisa Beğiç

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