Ljubljana, 18 October (STA) - Bank of Slovenia Governor Boštjan Vasle has commented on the Thursday's additional lowering of the eurozone interest rates by the ECB's governing council by saying the council's decisions will continue to maintain an appropriate monetary policy stance, aiming for a timely return to target inflation.
After the ECB Governing Council, which met at the Brdo estate in Slovenia, cut the interest rates by another 0.25 percentage points, Vasle stressed on Friday that future actions will depend on the given circumstances, specifically economic and financial data, the movement of core inflation, and the effectiveness of policy measures.
"This means we are not committing to any pre-determined path for interest rates, but will decide on their levels at each meeting individually," he emphasised.
Economic activity indicators have been somewhat weaker than expected. In September, the composite PMI for the eurozone was 49.6 points, moving into contraction for the first time since February, reflecting a continued decline in manufacturing and slower growth in the services sector.
The labour market shows signs of a gradual cooling in demand for labour, but despite rising labour costs, unemployment remains at historically low levels, Vasle pointed out.
Meanwhile, inflation in the eurozone continues to decline. In September, inflation dropped another 0.5 percentage points to 1.7%, driven by a sharp fall in energy inflation and a slight slowdown in core inflation. Core inflation stood at 2.7% in September, with high service inflation, at 3.9%, keeping it elevated.
"We expect inflation to temporarily rise again later this year before returning to target over the course of next year," the governor added.