Christine Lagarde, President of the European Central Bank (ECB), answered questions at an event organized by the Reuters news agency and made evaluations on the impact of the coronavirus on the economy, inflation and the Eurozone economy.
IN INCREASING UNCERTAINTY MARKETS NEED TO BE GUIDED
Lagarde noted that the ECB should not delay its policy-making decision, as markets need direction due to increased uncertainty.
Emphasizing the importance of explaining the ECB policy very clearly, Lagarde said, "It is very unlikely that rates will be raised next year. There are ways to gain clarity without making long-term commitments." said.
Stating that it is not very likely to increase interest rates in the Euro Zone next year, Lagarde said that the ECB will not hesitate to increase interest rates if conditions arise.
Commenting on inflation, Lagarde said, "I see an inflation profile that looks like a hump. The hump will decrease sooner or later. We predict that inflation will fall in 2022, and I'm sure of it." used the phrases.
Lagarde said he has reason to believe that energy prices, which cause high inflation in the Eurozone, will also fall drastically by the end of 2022.
The ECB launched the 1.85 trillion euro Pandemic Emergency Asset Purchase Program (PEPP) in 2020 to support the economy with cheap money due to the coronavirus epidemic. The Bank's asset purchases under PEPP are expected to continue until March 2022. Experts predict that the ECB's economic stimulus will not stop abruptly after the PEPP ends.
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