ECB will continue cutting interest rates – Lithuanian c.banker

  • 2024-06-07
  • BNS/TBT Staff

VILNIUS – The European Central Bank will continue cutting interests rates but this will depend on whether inflation can be contained, Gediminas Simkus, board chairman of the central Bank of Lithuania, said on Friday after the ECB cut interest rates by 0.25 percentage points for the first time in five years on Thursday.

He, however, refrained to comment on whether the ECB's next decision to cut interest rates could come as early as July. 

"It seems to me that the answer is quite obvious: if economic developments are in line with what is encoded in the forecasts, if that vision is fulfilled, it will mean less and less need for a restrictive monetary policy. And hat means lower interest rates. (...) By controlling inflation, if it’s done successfully, if it actually comes true… we will have a further decline in interest rates," Simkus told reporters on Friday.

"I would certainly not rush into talking about July now," he added.

The ECB on Thursday cut interest rates for the first time since 2019, trimming record high borrowing costs.