Yannis Stournaras, the Governor of the Bank of Greece and a member of the European Central Bank’s (ECB) Governing Council, has predicted that the ECB’s monetary tightening cycle will come to an end in 2023 unless there are significant changes. Stournaras, who is known for his dovish stance on monetary policy, made the comments in an interview with Greek news website imerisia.gr.
The ECB has been gradually raising interest rates as part of its efforts to combat inflation, which has been running above its target of just under 2%. However, Stournaras believes that the current cycle of rate hikes will come to an end this year. “As things stand at the moment, and if nothing changes dramatically, we can say that rate hikes will end in 2023,” he said.
Stournaras also suggested that interest rates will remain at their current level or higher until inflation reaches the ECB’s target. “Rates will remain where they are today or higher for some time until inflation comes very close to the 2% target,” he said.
Stournaras’ comments come amid growing concerns about the impact of higher interest rates on the global economy. Many economists believe that higher rates could lead to slower economic growth and increased financial instability.
Despite these concerns, the ECB has remained committed to its goal of achieving price stability in the eurozone. In addition to raising interest rates, the bank has also been purchasing large amounts of government bonds in an effort to boost inflation and stimulate economic growth.
However, Stournaras suggested that the ECB may need to reconsider its approach to monetary policy in the future. “We will have to take into account what has happened in the past, and also the lessons that have been learned,” he said.
The Governor of the Bank of Greece is not the only member of the ECB’s Governing Council to express concerns about the impact of higher interest rates. Last month, ECB President Christine Lagarde hinted that the bank may slow down the pace of its rate hikes if economic conditions worsen.
Despite these concerns, many economists believe that the ECB will continue to raise interest rates in the coming months as it seeks to achieve its inflation target. The bank is expected to announce its latest monetary policy decision on June 10th.
In conclusion, Yannis Stournaras, the Governor of the Bank of Greece, has predicted that the ECB’s monetary tightening cycle will come to an end in 2023 unless there are significant changes. Stournaras believes that interest rates will remain at their current level or higher until inflation reaches the ECB’s target of just under 2%. While there are concerns about the impact of higher rates on the global economy, the ECB remains committed to achieving price stability in the eurozone. However, Stournaras suggested that the bank may need to reconsider its approach to monetary policy in the future.
