MNI BRIEF: Too Soon For ECB To Discuss Cuts - Kazaks
Latvian central bank head tells MNI event rate cut discussions now would be premature.
Monetary policy transmission across the eurozone is strong and bank lending shows further tightening, but it is too soon to consider rate cuts, Bank of Latvia head and ECB Governing Council member Martins Kazaks told an MNI event on Wednesday.
"Inflation is moderating from earlier peaks, reflecting the fading impact of previous upward shocks," Kazaks said, according to the text of prepared remarks. But the ECB still needs to watch out for domestic price pressures, with profit margins still to soften and a clear peak in wage growth yet to be seen, he added.
Interest rates will remain at sufficiently restrictive levels for as long as necessary, with the level and duration determined in a data-dependent manner. But discussions on a rate cuts are premature, he said, adding that the ECB's balance sheet should be reduced in a gradual and orderly manner. (MNI SOURCES: ECB Needs Sub-3% Core Inflation To Consider Cuts)