Published by Global Banking & Finance Review®
Posted on November 17, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleECB's Olaf Sleijpen notes balanced inflation risks and appropriate interest rates, with no changes expected until new data in December.
AMSTERDAM (Reuters) -Risks surrounding the euro zone inflation outlook are balanced and the current level of interest rates is appropriate, Dutch central bank chief Olaf Sleijpen told a news conference on Monday.
The ECB has left interest rates unchanged since June and markets expect no change even in December, when the ECB releases a fresh set of economic projections, which could show price growth going under the bank's 2% target next year.
"Inflation risks in the euro area are balanced," Sleijpen, one of the newest members of the ECB's rate-setting Governing Council, said.
Euro zone inflation, hovering around the 2% target for most of this year, is set to dip below 2% in 2026 on a statistical base effect, and some policymakers fear that low price growth could get entrenched if firms adjust their wage and price-setting behaviour.
However, most policymakers have been downplaying the undershooting risk, solidifying market bets that the ECB is done cutting interest rates after halving the deposit rate to 2% in the year to June.
"Our December meeting will bring a lot of new data," Sleijpen said. "For now, I would say we are in a good place and if data remains consistent with the current picture in December I would see no reason to say we are no longer in a good place."
(Reporting by Bart Meijer; writing by Balazs Koranyi, Editing by William Maclean)
Monetary policy refers to the actions taken by a central bank to manage the money supply and interest rates in an economy to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy running smoothly.
The European Central Bank (ECB) is the central bank for the euro and is responsible for monetary policy within the Eurozone, aiming to maintain price stability and oversee the banking system.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage. They are influenced by central bank policies and affect economic activity.
The euro zone is a group of European Union countries that have adopted the euro as their official currency, facilitating easier trade and economic stability among member nations.
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