Robert Holzmann, a member of the European Central Bank’s monetary policy committee, said on Saturday that it is too early to know if the European Central Bank has begun a shift towards lowering borrowing costs after cutting the key interest rate this week.
The European Central Bank cut the interest rate it pays on bank deposits to 3.75% from a record high of 4.0% on Thursday, but refrained from promising any further easing after a series of disappointing wage and inflation data in recent weeks.
Holzmann, the head of the Austrian central bank, was the only member of the ECB’s 26-member Governing Council to oppose the interest rate cut. The decision by the bank was widely expected after the ECB had signaled its intentions early on.
Holzmann told Austrian radio that in the future, the bank will look to avoid putting itself in any kind of predicament. When asked whether the interest rate cut represents a shift towards lowering borrowing costs or was a step that does not commit the bank in a particular direction, Holzmann’s response was cautious, commenting, “I believe it is a step in the right direction.” Future decisions will depend on the data.
