PARIS (Reuters) – The European Central Bank (ECB) is “very close” to the high point in its interest rates, Banque de France Governor François Villeroy de Galhau said on Friday, saying the central bank was keeping its “open options” for its next monetary policy meetings.
The Frankfurt institute has raised its interest rates by 425 basis points since the summer of 2022, to bring them to highs of more than 20 years, and the debate is now strengthening between its officials to know if a break is needed, especially in the face of signs of an economic downturn.
“We are close, or very close, to the high point of our interest rates. On the other hand, we are still far from the moment when we could consider lowering them,” he told reporters.
“Our options are open, to this Council (that of September 14, editor’s note) as to the following ones”, he added.
François Villeroy de Galhau hailed an “encouraging sign” on underlying inflation which, according to him, has peaked since April and which “seems therefore to begin its reversal”.
The consumer price index excluding the most volatile items, unprocessed food and energy, slowed to 6.2% in August in the euro zone after 6.6% the previous month.
François Villeroy de Galhau also indicated that the Banque de France would revise “a little upwards” its growth forecast for 2023, currently 0.7%, after the good performance of the French economy in the second quarter.
INSEE confirmed Thursday that the gross domestic product (GDP) of France had increased by 0.5% over this period.
(Report Leigh Thomas, written by Zhifan Liu and Blandine Hénault, edited by Kate Entringer)
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