Fabio Panetta, European Central Bank Governing Council member and Governor of the Bank of Italy, said it was highly likely that a decision would be made in the future to further cut interest rates.
Mr. Panetta says that there is reason to believe that the stage of monetary policy easing is approaching. He made the corresponding statement on Wednesday, August 21, in Rimini. It is worth noting that in this case, the prospects of lowering the cost of borrowing at the pan-European level are implied.
Fabio Panetta also drew special attention to the fact that there is currently a tendency to slow down the inflationary process. His comments are among the first from a Governing Council member during the ECB’s summer break and arrive less than a month before rates are next set.
It is worth noting that for the eurozone, the prospects for monetary policy easing actually mean the continuation of the process that has already begun. The European financial regulator in June cut the record-high deposit rate by 25 basis points. Currently, the corresponding indicator is at 3.75%. At the same time, there was no rapid continuation of the lowering of the cost of borrowing in this case. In July, at the ECB meeting, it was decided to keep this indicator at the June level.
At the September meeting, officials of the mentioned financial institution are expected to formulate their assessment concerning the dynamic of inflation. In this case, it will become known how they perceive the growth rate of the cost of goods and services in the context of the prospects for continuing to adopt and implement measures to ease monetary policy. The continuation of the lowering of the cost of borrowing depends on the pace of slowing inflation.
