Gediminas Simkus, a member of the European Central Bank’s Governing Council, has expressed concerns about inflation falling short of the bank’s 2% target.
The Lithuanian official stated on Monday that there is a growing risk of this happening due to increased trade friction with the United States and a strengthening euro.
Simkus pointed out that the current borrowing costs are at the high end of the neutral rate range.
The neutral rate neither stimulates nor restricts economic activity. He suggested that these factors might lead to a potential interest-rate reduction in the upcoming meeting in June.
In a press conference in Vilnius, Simkus stated, "I see scope for an interest-rate reduction" at the next meeting.
