PARIS, Aug 31: France's central bank chief has called for the European Central Bank to cut interest rates at its next meeting in September as eurozone inflation gradually eases.
Reducing borrowing costs at the meeting would be "fair and wise", Bank of France governor Francois Villeroy de Galhau said in an interview with Le Point magazine published Friday.
"We are not yet at our two percent inflation target on a permanent basis, but we will very probably be there in the first half of next year for France and in the second half for the eurozone," he said.
Data this week showed that inflation in France and Germany, the eurozone's biggest economies, had fallen below two percent this month.
And official data released Friday showed consumer price rises in the 20 countries that use the euro eased to 2.2 percent in August, their lowest level in more than three years and not far off the ECB's two-percent target.
"If we waited until we were actually at two percent to lower rates, we would be acting too late," said the French central bank chief, noting that it takes some time for monetary policy changes to feed through to the economy.
The Frankfurt-based ECB launched a historic campaign of interest rate hikes in 2022 after Russia's invasion of Ukraine sent energy and food costs soaring. Inflation peaked at 10.6 percent in October that year.
With inflation easing, the ECB cut rates for the first time after the hiking cycle in June. It kept borrowing costs on hold in July but expectations have been growing for a further cut at its meeting on September 12. —AFP
