FRANKFURT: The European Central Bank can take its time on interest rates with monetary policy now set at a neutral level that is no longer restrictive, ECB policymaker Joachim Nagel said on German radio on Sunday.
The ECB cut interest rates on Thursday for the eighth time in a year but signalled at least a policy pause next month after inflation returned to its 2% target.
Nagel, who is also the president of Germany’s central bank, said rates are now at a neutral level – central-banker language to describe policy that neither expands nor brakes the economy.
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“We are no longer restrictive. I believe that we can now take the time to look at the situation first. We now have maximum flexibility at this interest rate level,” Nagel said in a live interview on Deutschlandfunk radio.
The ECB has lowered borrowing costs eight times, or by 2 percentage points since last June, seeking to prop up a euro zone economy that was struggling even before erratic U.S. economic and trade policies dealt it further blows.
