(Finance) – The Governor of the French central bank Francois Villeroy de Galhauwho is also a member of the Board of the ECB, confirmed the validity of the guidance provided by the President Christine Lagarde, which indicates rate hikes of 50 points basis.
“We said very clearly that we will decide from meeting to meeting, that we are data-driven, so it is too early to speculate on what we will do in March“, Villeroy said in an interview with Bloomberg TV on the sidelines of the Davos meeting, quoting the words of Lagarde, who stated at the last meeting that “we must expect rate hikes at a rate of 50 basis points for a certain period of time”.
Villeroy reiterated that the peak of the rate cycle should be achieved by summer, followed by an extended pause to ensure that the recent inflationary wave is overcome. Bloomberg sees a peak of deposit rate at 3.25% against the current 2%.
The President of the Banque de France then signaled that “the second part of the game will be more sophisticated” and that the ECB will soon have one available wider range of tools to fight inflation, including a plan to start reduce the asset purchase program by 15 billion of Euro per month (APP) starting in March.
As for the state of theeconomyVilleroy confirmed that ” more resilient than expected and we should therefore be able to avoid recession this year”.