March 18 (Reuters) – Inflation within the euro zone is proving more durable to crack than anticipated and the European Central Financial institution will doubtless want to lift rates of interest additional, probably above 4%, Austrian central financial institution chief Robert Holzmann stated on Saturday.
“Inflation is proving a lot more durable than thought,” Holzmann, a member of the ECB’s policymaking Governing Council, informed ORF 1 radio. “I do count on some extra rate of interest hikes,” he stated, including that the extent of additional will increase could be data-dependent.
Requested how excessive rates of interest might go, after the ECB raised its benchmark refinancing charge to three.50% on Thursday, he stated: “A few of us are hoping it should keep beneath 4(%). I am afraid it is most likely going to go above 4(%).”
The ECB raised rates of interest as promised by 50 foundation factors on Thursday, sticking with its struggle in opposition to inflation and going through down calls by some buyers to carry again on coverage tightening till turmoil within the banking sector eases.
Requested if he noticed the chance of one other world monetary disaster, like that of 2008, Holzmann replied: “No, as a result of each — the Silicon Valley Financial institution issues and now Credit score Suisse — are somewhat particular issues.”
Credit score Suisse was coping with “a longstanding restructuring downside”, he added.
Turning to the difficulty of Raiffeisen Financial institution Worldwide’s (RBIV.VI) Russia enterprise, Holzmann stated: “I see quite a lot of challenges however it’s fairly attainable {that a} answer will be discovered.” He didn’t specify what an answer might seem like.
Raiffeisen is deeply embedded within the Russian monetary system and is one in every of solely two international banks on the Russian central financial institution’s checklist of 13 “systemically essential credit score establishments”, underscoring its significance to Russia’s economic system, which is grappling with sweeping Western sanctions.
Raiffeisen shares fell sharply final month after the corporate acquired a request for info from the U.S. Treasury Division’s Workplace of Overseas Property Management (OFAC) to “make clear funds enterprise and associated processes maintained by RBI in gentle of the current developments associated to Russia and Ukraine”.
Austria’s finance ministry earlier this month performed down considerations in regards to the U.S. sanctions officers scrutinising Raiffeisen.
Reporting by Paul Carrel; Modifying by Gareth Jones and Hugh Lawson
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