ECB Vice President Luis de Guindos told a Portuguese newspaper Expresso, “the slowdown of the economy is not going to ‘take care’ of inflation on its own.”
“The slowdown of the economy will reduce demand pressures, which will lower inflation,” he added. “But, simultaneously, we have to act from the monetary policy standpoint to keep inflation expectations anchored and avoid second-round effects.”
“We need to continue the normalization of monetary policy,” he said. “More hikes might come in the next few months — how many times and by how much will depend fundamentally on the data — and we underscore our full determination to make inflation converge toward our definition of price stability”
“Further depreciation of the euro could be detrimental to inflationary pressures. On the contrary, if the euro stopped depreciating, this could be positive and support the fight against inflation. I hope that the recent depreciation trend is reversed in the near future”, he also noted.
