Reuters | 21.04.2023 12:49
HELSINKI, April 21 (Reuters) – The European Central Bank must maintain a tight demand monetary policy, Finland’s central bank governor Olli Rehn said in a speech on Friday.
“In monetary policy, we have moved into the area of limiting aggregate demand and there is no reason for us to ignore it or exit prematurely,” Rehn said.
However, he warned against a return to the economic “shock therapy” of the early 1980s, with interest rates rising sharply, arguing that inflation could be brought down in a less stringent way.
“The road to sustainable growth is narrow, but it can be followed with proactive and balanced policies,” said Rehn.
“In this way, we can achieve our goals without incurring unnecessary economic costs. Also because central banks are now independent and not subject to political pressure, as they were in the 1970s.”
(Reporting by Anne Kauranen; editing in Spanish by Benjamin Mejías Valencia)
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Written by: Reuters
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