ECB would be right to cut rates also in October - Kazaks

RIGA - It would be right for the European Central Bank (ECB) to cut rates also in October, said Martins Kazaks, the President of the Bank of Latvia, in an interview with TV3 this morning.

"From today's data that I see, I think a rate cut in October would also be the right decision," Kazaks said, while stressing that the decision to change rates would be taken after assessing the latest information on the situation in the economy.

He explained that the economy is currently weak and cutting rates will help strengthen it.

"The spring that started in the economy has not yet become summer. The recovery is quite uncertain. So I think a rate cut would be necessary to make the economy stronger," Kazaks said.

At the same time, he noted that although services inflation has not yet been overcome, overall consumer price inflation is depressed at very low levels, so they can afford to cut rates.

As reported, the European Central Bank (ECB) last month cut its interest rates.

The deposit facility rate was lowered 0.25 percentage points to 3.5 percent.

The main refinancing rate was cut 0.6 percentage points to 3.65 percent, and the marginal lending rate was also cut 0.6 percentage points to 3.9 percent, said the ECB.

The new rates came into force on September 18.