The European Central Bank (ECB) may start lowering interest rates in June, said Governor of the Bank of Latvia Mārtiņš Kazāks in an interview to TV3 programme 900 seconds.
But this will be possible if no unexpected shocks occur before then.
The lowering of interest rates may be a gradual process, so that it is possible to observe if inflation goes up again, said Kazāks, adding that although there is a high level of political uncertainty, a drop in inflation and price dynamics still continues.
According to Kazāks, the most important factor is what the focus is on, what the situation is in the labour market, specifically the situation with wages. Accurate data about that will be available in June.
As previously reported, ECB decided at a fifth consecutive meeting to maintain interest rates unchanged.
At a meeting of the Council of the European Central Bank in Frankfurt, it was decided to maintain the main refinancing operations rate at 4.5%, the deposit facility rate at 4% and the marginal lending facility rate at 4.75%.
To fight inflation, the ECB previously decided to increase interest rates at ten consecutive meetings.
According to the statement released after the meeting, the council found inflation continued going down – it was dictated by lower inflation for food and other products.
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