Frankfurt (AFP) – European Central Bank President Christine Lagarde said Wednesday that the bank may start raising interest rates from July due to rising inflation in the euro zone. Lagarde said the ECB would “first finish” its net asset purchases “at the beginning of the third quarter”, that is, in July, and then raise the interest rate for the first time “at a later time”, noting that “this could mean only a few weeks”. The central bank plans to hold its next monetary policy meeting on June 9 in Amsterdam and then on July 21 in Frankfurt before the summer vacation. “After the first rate hike, the process of returning to the normal path will be gradual,” Lagarde added, indicating further increases. The group of “hawks” within the European Central Bank, who are proponents of tighter monetary policy in the face of high inflation, are rushing to start the rate-raising cycle. “While inflation in the eurozone continues to rise, we must act,” the German central bank chief said Tuesday, and recommended “a first stage of normalization of interest rates at the European Central Bank in July.” This is what Isabel Schnabel, a member of the bank’s board of directors, called for at the end of April. Inflation reached a record 7.5% y/y in April in the eurozone, according to Eurostat, well above the European Central Bank’s medium-term target of 2%.
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