Sintra, Portugal (Reuters) – The European Central Bank (BCE) should maintain its deposit rate at the current level of 2%, unless new shocks considerably modify inflation prospects, said Alfred Kammer, director of the European Department of International Monetary Fund (IMF) on Wednesday.

The ECB has reduced its two percentage points since June 2024, but reported a break for this month, even if financial investors are still considering another reduction to 1.75% later in the year.

“The risks linked to inflation in the euro zone are double,” Alfred Kammer told Reuters on the sidelines of the ECB forum on the central bank in Sintra, in Portugal.

“This is why we think that the ECB should maintain the course and not move away from a deposit rate of 2% unless a shock considerably changes the inflation prospects. For the moment, we see nothing of such a magnitude”.

If the IMF adopts a different point of view from that of the markets, it is partly because it provides higher inflation than that of the ECB for next year.

The ECB plans to lower price growth under its target of 2% for 18 months from the third quarter, to reach a floor of 1.4% at the start of 2026.

“For next year, we are planning 1.9%inflation, which is superior to the projections of the ECB, in part because we have a different point of view on energy prices,” said Alfred Kammer.

If most ECB’s political leaders consider that the risks of inflation are balanced, an increasing number of them, including the Finnish Olli Rehn, the Belgian Pierre Wunsch and the Portuguese Mario Centeno, have all warned of the risk of too low inflation.

(Balazs Koranyi report; Mara Vîlcu for the , edited by Blandine Hénault)

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