Dow Jones - The European Central Bank will take account of the Federal Reserve's progress in lowering inflation when it decides the pace of cuts to its key interest rate after a first move in June, its vice president said in an interview published Tuesday.
The ECB has signaled that it will lower its key rate in June, but the Federal Reserve recently indicated that it is likely to move later in the year as U.S. inflation remains higher than anticipated. That divergence could weaken the euro and push prices of imported goods and services higher, feeding inflation in the eurozone.
In an interview with France's Le Monde newspaper, Luis De Guindos said the ECB is still on course for a June cut.
"Assuming there are no surprises between now and then, as you say in French, it's a 'fait accompli,'" he said.
ECB President Christine Lagarde has said that when setting its key rate, the central bank is data dependent and "not Fed-dependent." But De Guindos said developments in the U.S. will play a part in the ECB's decisions about the pace and scale of subsequent rate cuts.
"We will need to take into account what's happening in the United States, where inflation is higher," he said. " We don't have an exchange-rate target, but we need to take the impact of exchange rate movements into account."
Sumber : Dow Jones Newswires
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