European Central Bank (ECB) Administrative Council Member Fabio Panetta stated in an interview with the French newspaper Le Monde that it would take a few quarters for the effects of the increase in interest rates to be fully felt on the real economy and then reflected on inflation.

Fabio Panetta said, “Our monetary tightening will be felt in the coming months. We cannot ignore the fact that domestic demand will remain weak and this will be reflected in the ongoing economic weakness and even the technical recession in the Euro Area,” he said.

“Inflation is very high, but nothing to worry about,” said Panetta, amid supporters of loose monetary policy in the ECB Board of Directors. spoke in.

While Fabio Panetta stated that the ECB did not fully finish the rate hikes, he also pointed out that the rates will not rise much more.

Panetta said, “I don’t think it’s time to act very quickly now that we have come a long way. Now we have not reached the last goal, but we are not too far from it.”

In the middle, since July 2022, the ECB has increased the main interest rates 7 times in a row, totaling 375 basis points against hyperinflation. Analysts expect a 25 basis point increase at the ECB rate meeting to be held on June 15.

Source: Bloomberg HT

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