ECB interest rate peak in summer: head of the French central bank

PARIS, May 22 (Reuters) – Interest rate hikes by the European Central Bank are likely to peak at the end of summer, but now it’s more important how long rates stay high than their specific level, French central bank governor Francois said on Monday, Villeroy de Gallo.

Villeroi noted that the lag between the ECB’s unusually rapid rate hike over the past 10 months and its impact on the economy is likely to be at the top of the two-year range expected by economists.

This makes tracking the effect of interest rate hikes more important for monetary policy in the coming months than how big further rate hikes will be.

“Today, I expect we will reach the final level of the exchange rate no later than the summer,” Villeroi said at an event hosted by the Banque de France.

“In the meantime, we have three possible meetings of the Board of Governors to raise interest rates or put them on hold, but we should not draw conclusions from this or prefer one or the other final rate,” he added.

The original message in English is available under the code: (Lee Thomas, translation: Elizaveta Zhuravleva)