LIMASSOL (Reuters) – Cyprus Central Bank Governor Constantinos Herodotou said that the European Central Bank’s monetary policy has proven effective in containing prices.
“The latest inflation data confirm that monetary policy is effective and has an impact on inflation,” Herodoto, who is also a member of the European Central Bank’s governing council, said at a conference.
“The ECB has managed to keep inflation expectations steady, with most measures of long-term inflation expectations currently at around 2%, which is the target inflation rate,” Herodoto said.
However, Cyprus’ central governor stated that “material uncertainty” remains, referring to the recent rise in energy prices which could once again impact the rest of the economy as prices rise.
“Furthermore, the high wages and profit margins observed in the eurozone last year need to be closely monitored, although they are currently expected to return to normal,” Herodoto said.
In September, eurozone inflation fell to its lowest level in two years.
Consumer prices in the twenty eurozone countries rose by 4.3% in September compared to 5.2% in the previous month, recording the smallest increase since October 2021, according to the preliminary Eurostat reading published last Friday.
(Translated by Alessandro Parodi, Edited by Francesca Pissoneri)
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