Bank of Portugal Governor Banco de Portugal does not support a 75 point rate hike, at the October meeting of the European Central Bank (ECB). And so Mario Centeno places himself in the “dovish” wing of the establishment, fearing that the tightening of this dimension will lead to more instability in the markets.
Asked if it was time to discuss this “quantitative tightening”, the Portuguese official noted that “at the moment, the expectation of further discussions could, in my opinion, have a destabilizing effect that we really need to avoid,” he said – Quoted by Reuters – in Vilnius, Lithuania, where he meets at a meeting of governors.
Already in Bloomberg, Mario Centeno warned that an excessive increase in interest rates to contain inflation risks weakening the economy, at a time when there is a risk of a recession, due to the exacerbation of the energy crisis as well. Thus, the governor of the Bank of Portugal called for “balanced measures” that could be “a source of stability”. “One thing that always worries me in making a decision is not to push it back from the path we have to follow,” he said. “If we go back and forth, it will send mixed signals to the markets, the agents and our citizens — that’s bad,” he concluded.
Thus, Mario Centeno is a dissenting voice from the sentiments that dominate the European Central Bank, with many conservatives calling for a 75 basis point increase at next month’s meeting. This Thursday, officials in Lithuania and Estonia were in favor of raising interest rates by that amount, echoing the rulers of Slovakia, Austria and Finland.
However, despite defending a blunt rise, the Portuguese official will not have the right to vote at the next meeting of the European Central Bank, as he did not have at the previous meeting – where the monetary authority decided to raise interest rates by 75 points. . Basis, – due to the rotation system of voting rights in the Board of Directors.
Last update at 13:00
Emily Brontë is a journalist and feature writer specialising in culture, entertainment, literature, and current affairs. She is dedicated to producing clear, accurate reporting that helps readers stay informed about developments in the UK and around the world.
