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Lagarde says ECB left rates unchanged in July, despite hike questions

Lagarde also reiterated that euro strength typically follows relatively higher interest rates, linking the ECB’s policy choices to FX moves.

Reported · Written up by our desk · Central Banks

Christine Lagarde, President of the European Central Bank, addressed press questions about whether the ECB should consider a rate hike after the central bank decided to leave key rates unchanged at its July policy meeting, according to FXStreet.

Lagarde framed the ECB’s approach around its price stability mandate, which targets inflation at around 2%, and said the ECB primarily uses interest rate changes to pursue that goal.

The ECB sets monetary policy through decisions made by the Governing Council at meetings held eight times a year, and the decision process involves heads of euro area national banks and six permanent members, including Lagarde.

FXStreet also noted that in broader ECB tools, quantitative easing is typically associated with a weaker euro, while quantitative tightening is generally viewed as supportive for the euro.

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