The European Central Bank (ECB) is likely to cut its key rates by 25 basis points when the governing council meets at the beginning of June, ECB Vice President Luis de Guindos has indicated in an interview published on Thursday.
Speaking to the Austrian daily Oberösterreichische Nachrichten, De Guindos said the ECB took a transparent attitude regarding the June 6 monetary policy meeting and was adopting a cautious approach. This indicated a cut of 25 basis points, he said.
The rate for fixed rate tenders, the ECB rate for lending to commercial banks in the 20-member eurozone, currently stands at 4.5%. The ECB's deposit facility, the rate the banks receive for deposits, is 4%.
The ECB brought years of zero and negative rates to an end in July 2022 so as to bring down inflation, which had risen to record heights. There have been 10 successive hikes.
Calls have been heard in recent months for the ECB to loosen monetary policy by cutting rates to ease financing conditions for business and investors and boost weak economic growth in key eurozone economies.
De Guindos declined to predict ECB moves down the line. He pointed to a high level of uncertainty and said nothing had as yet been decided. The governing council would await developments in the economic data, he said.
The ECB is to publish its economic forecast for the eurozone in June, with predictions for both growth and inflation.