The European Central Bank (ECB) kept its key deposit rate at a record high of 4 per cent on Thursday but laid a path for a cut in June.
The bank’s governing council, led by president Christine Lagarde, noted that inflation is continuing to ease, led by lower food and goods prices, even if service prices remain high.
It said that if confidence increased that inflation is converging on its 2 per cent target “in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction”. It is the clearest official signal yet from the governing council that rate cuts are likely on the way, even if many individual members, including Ms Lagarde, had previously pointed towards a potential June cut.
Ms Lagarde told a press conference that the 26-member governing council will have access to “a lot more data” and a fresh set of inflation projections from ECB staff by the time it sits down for its next monetary policy meeting on June 6th.
Source: Trade Finance
