(Reuters) – The European Central Bank’s (ECB) next move is likely to be an interest rate cut, which could happen later this year, but the institution will be patient before making a move. such monetary easing, declared Tuesday the governor of the Bank of France, François Villeroy de Galhau.
“The ECB’s next decision will be a reduction, unless there is a surprise, but will depend on the data,” the member of the ECB’s governing council told Bloomberg TV on the sidelines of the World Economic Forum in Davos where he is present.
However, “the central bank must not decide hastily on a reduction,” warned the official. “We have to be patient.”
Earlier Tuesday, during a round table organized at the Davos forum, François Villeroy de Galhau estimated that the ECB could not yet claim victory in its fight against inflation, while mentioning a rate cut in the course of the year.
“Unless there is a major surprise – I am thinking in the Middle East – our next action will be a reduction, probably this year. I will not give any indication on the season (where this reduction could take place),” he said.
The governor of the Bank of France said he expected a “rather soft” landing for European economies but stressed that higher rates could push states to more budgetary discipline.
“The period which is opening will be a period of money at the right price, and not a period of free and easy money”, like that which has prevailed in recent years, specified François Villeroy de Galhau.
His comments come after those of several other members of the ECB’s governing council who have said in recent days that considering a rate cut was premature.
On Tuesday, Finnish Governing Council member Tuomas Valimaki said it was better “to wait a little longer rather than lowering rates prematurely and then having to reverse course.”
The governor of the Portuguese central bank, Mario Centeno, for his part indicated that rate cuts would be discussed “when the time comes”.
(Written by Balazs Koranyi, Sudip Kar Gupta, Corentin Chappron for the , edited by Blandine Hénault)
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