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MNI BRIEF: Bond Rout Result Of Monetary Policy Lags -Centeno

(MNI) Lisbon

The recent spike in government bond yields is “evidence of the gradual process of monetary policy transmission” into the economy, Bank of Portugal governor Mario Centeno said Wednesday, pointing to the fact the Eurozone hadn't yet seen the full effects of monetary policy transmission.

“In the securities markets we haven’t yet seen all the tightening that we could see,” Centeno told a press conference Wednesday in response to a question from MNI.

Turning to inflation, Centeno said it was an “arithmetical fact” that euro area inflation is falling faster than it rose, noting that, even if interest rates are a sufficient level to bring inflation back to 2%, if downward economy risks materialise -- and “lots of them are starting to do so” --interest rate cuts would be a discussion topic.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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