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ECB’s Centeno says policy normalisation must happen in sustainable way

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© Reuters. FILE PHOTO: European Central Bank governing council member Mario Centeno speaks during an interview with Reuters in Lisbon, Portugal, March 15, 2021. REUTERS/Pedro Nunes/

LISBON (Reuters) – The normalisation of the European Central Bank’s monetary policy after a long period of ultra-low rates is needed and must happen in a sustainable way, increasing the ECB’s intervention capacity, its Governing Council member Mario Centeno said on Tuesday.

With inflation soaring to a record high of 7.5% in the euro zone last month, well above the ECB’s 2% target, policymakers are increasingly advocating a rapid unwinding of stimulus, and several want a rate hike already in July.

“If it (normalisation) is done with the sustainability that we all want, and the ECB is working on it, it will mean increased intervention capacity of the central bank in the short and medium term,” Centeno told reporters.

“Low interest rates are a reality with a term that will be short”, and economic agents must take this into account, he added.

ECB’s Centeno says policy normalisation must happen in sustainable way

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