FX.co ★ Robert Holzmann: ECB should switch to flexible monetary policy

The current stance of the European Central Bank is causing concerns. A rapidly rising inflation is turning into a grave problem. Most experts suppose that the ECB should take immediate measures.

Robert Holzmann, governor of the Austrian Central Bank, is among those who believe that the regulator should do something to stabilize the situation. Recently, he called on the ECB leaders to be flexible concerning their monetary policy.

Notably, Robert Holzmann is a hawkish member of the ECB’s Governing Council. In other words, he supports a hike in the interest rate. The economist is calling for the monetary authorities to search for tools to cap soaring inflation that is a “tail risk that we cannot exclude.”

“We would have wished a different guidance, which doesn’t bind us too long in the future, in order to stay agile, and ready in case inflation requires an earlier liftoff,” Robert Holzmann said.

His words followed the announcement that the ECB would keep the key interest rate at low levels for the foreseeable future. The regulator is planning to maintain the benchmark rate near the zero level until the eurozone inflation hits the targeted level of 2%.