PARIS (Reuters) – The European Central Bank (ECB) has come “most of the way” in terms of monetary tightening to fight inflation “even if there will probably still be some increases”, François Villeroy said on Friday. by Galhau.
“From now on, perseverance counts more than speed. We have shown that we are fast, we are ready to be tenacious for as long as it takes”, said the Governor of the Banque de France on Radio Classique the day after the raising of the ECB rate by 25 basis points, a smaller increase than the previous ones.
“What played a role in the deceleration is what is called the transmission of monetary policy (…) the effect to come, the effect of acquired past rate hikes”, has commented François Villeroy de Galhau, specifying that this time of effect could be spread over one or two years.
“Duration now matters more than speed,” he continued. “There is good news, it is that the economic situation is resilient (…) We are going to defeat inflation without causing a recession”, added François Villeroy de Galhau, reaffirming the ECB’s determination to bring back the inflation towards 2% “by 2025 maybe even by the end of 2024”.
(Written by Jean-Stéphane Brosse, edited by Kate Entringer)
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