European Central Bank Governor: No need to adjust interest rates in the short term, but does not rule out a rate hike if necessary.

Jin10 data reported on September 12, the European Central Bank Governing Council member and Central Bank of Cyprus President Christodoulos Patsalides stated on Friday that the European Central Bank does not need to adjust the benchmark interest rate in the near term, and future adjustments could be in both directions. He mentioned that as long as inflation develops as expected, “the current interest rate is appropriate.” Patsalides noted that it can be fairly said that the inflation risks are currently balanced, and in this context, “the next step for interest rates could be up or down.” He emphasized that all options are on the table and that the possibility of an interest rate hike will not be ruled out if necessary. The forecast for the Harmonized Consumer Price Index (HICP) in 2026 is “only a short-term deviation from the 2% target,” and the European Central Bank expects it to return to 1.9% by 2027. “Therefore, there is no reason to overly worry about inflation being persistently below target.” Regarding the adjustment of the 2027 inflation expectation from 2% in June to 1.9%, he stated that the two predictions are “almost the same,” mainly due to technical assumptions such as exchange rates, rather than changes in fundamentals.