ECB's Santos Pereira: monetary policy has done its job, no need to change rates

ECB's Santos Pereira: monetary policy has done its job, no need to change rates | Global Banking & Finance Review | GBAF

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Home > Finance > ECB's Santos Pereira: monetary policy has done its job, no need to change rates

Finance

ECB's Santos Pereira: monetary policy has done its job, no need to change rates

Published by Global Banking and Finance Review

Posted on January 8, 2026

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Tags:monetary policy financial markets economic growth

LISBON, Jan 8 (Reuters) - European Central Bank policymaker Alvaro Santos Pereira urged governments to do more to lift growth in the euro zone, saying ECB policy had done its work to support the economy and there was no reason to change interest rates.

The eurozone is in a "situation of price stability," he said, adding the ECB expected inflation levels to remain around its target of 2%.

"If (inflation) continues like this, there are no reasons to change monetary policy, which has already done what was needed to help the economy when it was necessary," he said in an interview with public broadcaster RTP late on Wednesday.

Santos Pereira, who is also governor of the Bank of Portugal, said that if growth were sluggish in the European Union, it was not the fault of ECB policy.

He urged the EU to deepen the single market in areas, including services, transport, electricity to fully harness Europe's 450 million consumers.

"What is needed now is for governments and the European Union to move forward with structural reforms that enable countries to grow more," he said.

Last month, the ECB kept policy rates unchanged and raised some of its growth projections, cementing market expectations that it would keep its 2% deposit rate steady for many months.

The ECB sees inflation dipping below 2% in 2026 and 2027, mainly because of lower energy costs, before returning to the medium-term target in 2028. It expects the euro zone to grow 1.2% in 2026, down from an expected 1.4% in 2025.

(Reporting by Sergio Goncalves; editing by Barbara Lewis)

Frequently Asked Questions about ECB's Santos Pereira: monetary policy has done its job, no need to change rates

1What is monetary policy?

Monetary policy refers to the actions taken by a central bank to control the money supply and interest rates in an economy to achieve macroeconomic goals such as controlling inflation and stabilizing currency.

2What is inflation?

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.

3What is the role of a central bank?

A central bank manages a country's currency, money supply, and interest rates. It oversees the banking system and implements monetary policy to promote economic stability and growth.

4What is economic growth?

Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured as the percentage increase in real GDP.

5What is price stability?

Price stability refers to a situation where prices in an economy do not change much over time, helping to maintain the purchasing power of money and reduce uncertainty in economic decisions.