Lisbon, Nov. 25, 2024 (Lusa) - The Governor of the Bank of Portugal (BdP) said on Monday that his "preferred scenario" is to have interest rates at or close to 2%, arguing that the focus should be on investment.
"Bringing interest rates to 2% or close to 2% will be my preferred scenario," admitted BdP governor Mário Centeno at the CNN Portugal International Summit, taking place in Lisbon under the theme "Embrace the Future: Peace and Sustainable Development".
Even so, the former minister emphasised that inflation has been converging towards the 2% target, pointing out that, statistically, there is no difference between 2.2% or 1.8%.
Centeno also pointed out that investment in the eurozone is currently very low, which is why the focus should be on this issue.
In his speech on ‘Budgetary and monetary policy focused on growth’, the former minister of finance also highlighted the contribution of the labour market, pointing out that since the Covid-19 pandemic, 11 million more jobs have been created, which "had not happened before in the eurozone".
Of these, he pointed out, six million are migrants.
Particularly in Portugal, the labour market has been growing at an ‘astonishing speed’ and the economy has been open to all talents.
On 17 October, the ECB cut interest rates by a quarter of a point for the third time this year, the second in a row, to 3.25%, in the face of inflation that it considers to be ‘on track’ and worse than expected economic activity.
After the meeting in Slovenia on 17 October, the ECB is scheduled to hold its last monetary policy meeting of the year on 12 December.
On 18 September, the US Federal Reserve (Fed) cut interest rates by 50 basis points, in what was the first cut since 2020.
Euribor is set by the average of the rates at which a group of 19 banks in the eurozone are willing to lend money to each other on the interbank market.
Asked about the impact on the eurozone of the political changes in North America with the election of Trump, Centeno noted that the US itself will be affected by the policies put forward and that Europe should see the recent announcements as alarm bells.
Making a reference to Elvis Presley, and on the off-chance that the US follows the policies that have been announced, Centeno said, ‘We can't go on together.’
The governor insisted that Europe must listen "very carefully and realise what policies the US is going to implement".
PE/AYLS // AYLS
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