Bank of Greece (BoG) governor Yannis Stournaras estimated that interest rates will not continue to rise, adding that their de-escalation will begin as of mid-2024.
In an interview to the German newspaper Handelsblatt, Stournaras stated that “interest rates have reached their highest level”, clarifying however that this is his personal opinion.
Asked about the time of de-escalation, he said that “with the added uncertainty because of the conflict in the Middle East, it is even more difficult to answer. I would do it provided that inflation falls below the 3% threshold in mid-2024 on a permanent and sustainable basis.” He also expressed the hope that the same opinion is shared by many other central bankers who participate in the ECB’s Board of Directors.
Regarding the issue of the rise in bond yields and the risks this causes in the refinancing of the public debt, Stournaras said that especially for Greece, the whole situation is “a pleasant surprise, as the debt refinancing needs are small, the effect of the growth-interest rate differential is very favorable and there are primary fiscal surpluses. We deserve to sleep peacefully at night, especially after what we have suffered in the past.”
