The European Central Bank’s policymakers Martins Kazaks said the central bank could end its stimulus program earlier than planned, as reported by Reuters. However, its is unlikely interest rates will be raised in July as investors are expecting.
Investors earlier had brought forward their expectation on the bank’s first rates hike in more than a decade after ECB’s President Christine Lagarde on Thursday signaled on necessity of increasing interest rate to tackle inflation.
“July would imply an extremely and unlikely quick pace of tapering,” Kazaks said in an interview. “But overall, at the current juncture, naming a specific month would be much premature.”
The ECB has long said it would end its bond purchases “shortly before” raising its deposit rate from minus 0.5%, and Lagarde and colleagues have reaffirmed that commitment in recent days.
According to Reuters sources, asset purchases are currently set to run at least until October. However, the ECB is likely to bring that date forward at its March 10 meeting.
With euro zone inflation at a record 5.1% in January – more than twice the ECB’s 2% goal – Kazaks was also open to action.