European Central Bank (ECB) President Christine Lagarde said on Thursday that interest rates in the eurozone have reached their peak after rising amid high inflation last year.
“Unless there are additional shocks, rates will not continue to rise,” Lagarde assured in an interview with France 2 television.
“I believe they have reached their peak,” he added, but avoided specifying the timing of a possible cut in key interest rates.
“If we win the battle against inflation, that is, if we are confident that inflation will be at 2%, then rates will begin to fall,” the head of the ECB said, recalling her goal of an inflation rate of 2%.
“This is the logic,” he emphasized, although he refused to “give a date.”
To combat high inflation, the ECB carried out an unprecedented round of monetary tightening: ten consecutive rate hikes between July 2022 and September 2023.
The pace of consumer price growth has slowed significantly since inflation reached a double-digit peak at the end of 2022, but remains above the ECB’s 2% target.
Eurozone inflation accelerated slightly in December to 2.9% from 2.4% in November, a jump that was widely expected.
At its last monetary policy meeting on December 14, the ECB kept base interest rates for the second (consecutive) time since July 21, 2022.
The ECB’s next monetary policy meeting, which will be the first this year, will take place on January 25.
The ECB deposit rate remains at 4%, the highest level recorded since the introduction of the single currency in 1999, while the main refinancing rate remains at 4.5% and the rate applicable to the margin lending facility , remains at 4.75%.