PARIS (Reuters) – How long the European Central Bank keeps rates elevated is more important than the actual level, though rates are close to levels needed to get inflation headed to a 2% target, ECB policymaker Francois Villeroy de Galhau said on Wednesday.
“Due to monetary lags, length is more important than level,” Villeroy, who is also head of the French central bank, told an economics conference in Paris.
He added that the ECB’s key interest rates will be brought to levels sufficiently restrictive to ensure inflation returns to its 2% medium-term target and would be kept there as long as necessary.
“We are close to the former (levels) but so should be sufficiently patient on the latter (duration),” Villeroy said.