ECB's Vujcic on Monetary Policy: A Gradual Approach Preferred

Boris Vujcic, a member of the European Central Bank (ECB) Governing Council and Governor of the Croatian National Bank (HNB), has recently shared his insights on the future of monetary policy. In an interview with Econostream, Vujcic emphasized the importance of a measured approach to rate adjustments, rather than opting for sudden cuts.

Highlighting the current economic climate, Vujcic pointed out that while market expectations for rate reductions are understandable, the presence of high inflation, particularly in the services sector, and robust wage growth necessitates a cautious strategy. Additionally, the unpredictable nature of geopolitical risks further complicates the decision-making process.

According to Vujcic, the ECB's current projections align closely with ongoing economic developments, making a gradual adjustment of rates a more prudent choice. This approach not only ensures stability but also allows for flexibility in response to future uncertainties.