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ECB must keep inflation fight as top priority, de Guindos says

Published 11/16/2022, 04:37 AM
Updated 11/16/2022, 04:41 AM
© Reuters. FILE PHOTO: A view of signage outside the European Central Bank (ECB) building in Frankfurt, Germany October 27, 2022. REUTERS/Wolfgang Rattay/File Photo

FRANKFURT (Reuters) - The European Central Bank must prioritize its fight against high inflation because that will in turn improve the currency bloc's overall financial stability, ECB Vice President Luis de Guindos said on Wednesday.

"It's very difficult to have financial stability without price stability," he told a news conference. "I think that the main risk now for financial stability, for growth, is to have inflation at very high levels."

Critics have said that rapid rate hikes by the ECB are fuelling market volatility and exacerbating a downturn, so the ECB's own actions may be harming stability.

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For the Eurodollar, it will be important how long the Fed will keep rates at high values, where the European Central Bank will go in 2023 with the tightening of interest rates and monetary policy (reduction of the balance sheet), and how long and deep the economic state of the Eurozone recession will be in the coming quarters. will
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