Dimitar Radev urges ECB to prioritize vigilance over patience

Dimitar Radev, Governor of the Bulgarian National Bank and member of the European Central Bank (ECB) Governing Council, has advised the ECB to prioritize vigilance over patience regarding interest rate decisions. Speaking to Econostream, Radev noted that current economic data increasingly supports the possibility of another measured interest rate hike during the September meeting.

Radev cited inflation remaining above the ECB’s target and the potential for a prolonged energy shock as primary concerns. He emphasized that while the ECB must allow previous rate increases time to impact the economy, it must also remain prepared to act if inflationary pressures persist. He stated, “patience in this case does not mean passivity.”

According to Radev, the decision to hike rates will depend on monitoring energy markets and financial conditions. Factors that could argue against a hike include clear evidence of easing energy price pressures, contained broader inflation, or a stronger-than-expected transmission of monetary policy to the economy. Conversely, further economic deterioration would strengthen the case for action.