ANDIn an interview with Econostream, asked whether it would make sense to start with a 50 basis point rate cut or if he is resigned to a 25 basis point drop, Mário Centeno said that the expectation raised by the journalist “is justified”, given the communication of the ECB following the last meeting.
However, he stressed that it was “important to note that the decision will be based on a new forecast for the euro zone”, sending more information to June.
“The previous forecast brought surprises that included a downward revision of growth and a downward revision of the inflation trajectory, which probably made the next phase of this monetary policy cycle with a reduction in the rate clearer,” he said.
Mário Centeno also admitted that the ECB’s economic forecasts are “compatible” and “incorporate a total underlying reduction this year of 100 basis points”.
“A reduction of 100 basis points this year, being compatible with our result and our projections, is compatible with inflation of 2%, which is our objective”, he considered.
The ECB left interest rates unchanged at the April meeting, with the main refinancing rate at 4.5%, the highest level since 2001, but was open to reducing them if inflation continues its downward trend. .
Read Also: Centeno defends conditions for several interest rate cuts this year
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