ECB’s Nagel: Too early to speculate on rate hikes

Joachim Nagel, a member of the European Central Bank (ECB) Governing Council, stated on Friday that it is too early to speculate on rate hikes. He mentioned that policy moves are dependent on energy prices and that he would not exclude the need to enter mildly restrictive territory. The EUR/USD pair was down 0.01% on the day at 1.1610.

The ECB, based in Frankfurt, Germany, is the reserve bank for the Eurozone and sets interest rates and manages monetary policy for the region. Its primary mandate is to maintain price stability, with an inflation target of around 2%. The ECB achieves this by raising or lowering interest rates, which usually result in a stronger or weaker Euro, respectively.

The Governing Council makes monetary policy decisions at meetings held eight times a year, with decisions made by heads of Eurozone national banks and six permanent members, including ECB President Christine Lagarde. In extreme situations, the ECB can use a policy tool called Quantitative Easing, printing Euros and buying assets to provide liquidity to banks and financial institutions, usually resulting in a weaker Euro.