Tech & Science : Currency Houses: Inflation should sink in the medium term

Most Americans seeing effects of inflation, survey claims, with many not expecting any relief

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of Europe's currency headers expect a decline in recording rates in the medium term.

Muss sich Europa an höhere Preise gewöhnen? © Picture Alliance / Lino Mirgeler / DPA has to get used to Europe at higher prices?

In the current situation, it is an offer shock, said the Chief Volkswirt of the European Central Bank (ECB), Philip Lane, the US daily "Politico" in a Tuesday-published interview. "And for these reasons, we would still assert (...) that most of this inflation will decay."

that does not necessarily mean that the high prices would be traced back, Lane said. "Europe may have to get used to higher prices." But the dynamics will decrease. "We believe that inflation will go back in the course of this year and will be much lower in the next and next year than this year."

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The Chief of the Austrian National Bank, Robert Holzmann, said the "Börsen-Zeitung" (Wednesday): "There are good arguments for accepting a medium term again falling inflation. The energy prices are likely to decline from the current climax, especially since high prices investments in energy production become more attractive - which should increase the offer and lower prices. " However, it applies to be vigilant.


Video: Inflation and omikron crisis Tilt consumption mood (Reuters)

key interest rate on record low

For months, rising energy prices have been expensive. The war in Ukraine heats up this development. In the euro area, inflation reached the highest level in February with 5.9 percent since the introduction of the euro as a clearing currency 1999.

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The ECB, the highest goal of which are stable prices at a level of inflation of two percent, drives the exit from its stubborn inflation in the light of persistently high inflation ultra-skating monetary policy ahead. The central bank introduced to the third quarter of 2022 the purchase of additional bonds of states and businesses.

If the interest rates are raised, the central bank leaves. "The most important thing from our point of view is that we have created a flexible and optional monetary policy framework that is explicitly designed to respond to all medium-term developments," reiterated Chief Volkswirt Lane.

Holzmann, who coincides in the ECB Council on the monetary policy course, pleads for two interest rate increases and an end to the negative interest rate this year - and warns that the ECB could otherwise fallen in the fight against inflation. "An increase in deposit interest to zero percent by the end of the year would be important for monetary policy because it increases the optionality.» Currently, this deposit is minus 0.5 percent. The key interest rate in the euro area is on the record low of zero percent.

Has India’s central bank avoided tackling high inflation? .
As the RBI focuses on managing Indian government’s debt & propping up growth, inflation soars.As the RBI’s monetary policy committee (MPC) meets from April 6-8 to decide its latest interest rate policy, official documents reviewed by The Reporters’ Collective (TRC) and Al Jazeera show the RBI has so far kept interest rates low by exploiting what the Ministry of Finance treats as a built-in “escape clause” in the monetary policy, which permits inflation to rise above the mandated target of 4 percent.

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