Central Banks
ECB’s Lingering Inflation Risks Warrant Caution, Patsalides Says
- Cypriot central banker sees room to cut rates carefully
- Risks to inflation outlook are balanced, he says in interview
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The European Central Bank has room to lower borrowing costs further as inflation approaches its target but must pay close attention to upside risks, according to Governing Council member Christodoulos Patsalides.
While the 20-nation euro economy is undoubtedly slowing and may prove weaker than the most recent forecasts indicate, the same can’t be said about price pressures, said Patsalides, who also heads the Cypriot central bank. Policymakers should therefore tread carefully and avoid removing restriction too soon.