SINTRA, Portuga — Central bank chiefs and
economists gather Monday evening at their annual forum in southern
Portugal to
discuss the best approach to the inflationary challenges exacerbated by
Russia’s invasion of Ukraine.
اضافة اعلان
Some 200 delegates will attend the ECB Forum on
Central Banking at a luxury hotel in Sintra, west of Lisbon, after two years of
COVID-imposed virtual gatherings.
When ECB President
Christine Lagarde last attended
this event, it was in her previous role as director general of the
International Monetary Fund back in 2014.
Also attending will be Jerome Powell, head of the US
Federal Reserve, and Andrew Bailey, governor of the
Bank of England.
They will be joined by Agustin Carstens, general
manager of the Bank for International Settlements and all four are set to
discuss the issues at a seminar on Wednesday, the last day of the forum.
In its annual report released on Sunday, the BIS
warned that central banks must not let inflation become entrenched, with the
threat of stagflation looming over the global economy.
“The key for central banks is to act quickly and
decisively before inflation becomes entrenched,” said Carstens in the report.
Lagarde’s speech key
for markets
Tuesday morning’s speech by
Lagarde will be closely followed by the markets. The
European Central Bank is
preparing to raise its interest rates in July — for the first time in 11 years
— in response to rising inflation.
That has increased concern about the risk of a debt
crisis in the eurozone, with a growing difference in the interest rates being
required in the northern and southern European states for borrowing and
financing their deficits.
The ECB has recently had to work to reassure
investors on this issue, and any fresh details of what it plans to do will be
closely followed.
The mood of the meeting is likely to be serious.
According to European sources, Lagarde told EU
leaders gathered in
Brussels on Friday that the war in Ukraine was having a
marked effect on the eurozone.
The rising price of gas and imported raw materials
was putting pressure on inflation and that was set to last for some time.
The uncertainty created by the war was hitting
economic activity, she said, according to the same source.
After the shock of the COVID-19 pandemic, central
banks initially saw the return of inflation as temporary, as the economy picked
up again.
But the rise in prices has sharply accelerated since
Russia’s invasion of Ukraine in February.
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