HomeTop Global NewsBank of Italy Governor Insists That ECB Must Restrain Interest Rate Rise

Bank of Italy Governor Insists That ECB Must Restrain Interest Rate Rise

Bank of Italy governor Ignazio Visco insisted on Saturday that the European Central Bank must avoid pushing real interest rates too high. An ECB Governing Council member, Visco explained that he is concerned about the level of private and public debt in the euro area as well as the effects that higher interest rates would bring. He also expressed his belief that recession is not required in order to suppress inflation.

Having raised interest rates by three percentage points since July last year, the ECB has committed to a 50 basis point hike for March. The ECB has not provided any insight into its actions following the March increase.

“Today, disinflation is obviously needed, but given the levels of private and public debts that prevail in the euro area, we must be careful to avoid engineering an unnecessary and excessive rise in real interest rates,” Visco explained. “Indeed, I am convinced that the credibility of our actions is preserved not by flexing our muscles in the face of inflation, but by continually showing wisdom and balance.”

Italian politicians continue to express concerns over the prospect of continually rising interest rates due to the country’s growing debt problem.

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