If inflation maintains a downward trend, the next step will be to cut interest rates, says ECB member

The head of the European Central Bank (ECB) and president of the BC of Portugal, Mário Centeno, stated that the next step of monetary policy will be an interest rate cut, if inflation maintains its current downward trajectory in the coming months. The comments took place at the opening of the Banking Forum, promoted by Economic Journalin Lisbon.

“We don’t know when it will happen, but we know the direction of monetary policy. I am sure that if this scenario materializes and inflation gives us this space, we can start a cycle of normalization of rates”, defended Centeno, according to a video reproduced by the Portuguese television channel RTP3.

According to the leader, the reduction should gradually bring interest rates closer to their neutral level, maintaining restrictive financial conditions for many months as necessary to combat inflation.