High interest rates could begin to fall in early summer

“The beginning of the summer, I think, is when that will start to happen,” Kazak said, while stressing that rate cuts would be done cautiously, gradually, as the economy responds, and that rates should not be expected to return to zero.

He also noted that, according to financial market forecasts, a rate cut is expected in June. “I would have no objection to this at the moment. Therefore, I think that before Midsummer we could also see that the central bank starts reducing rates,” Kazaks said.

The president of the Bank of Latvia also emphasized that the uncertainty is still high, so one must be very careful so that inflation does not revive again.

It has already been announced that the ECB Council at its meeting on March 7 this year decided to keep interest rates unchanged for the fourth time in a row, including the main rate for refinancing operations was kept at 4.5%, the overnight deposit rate was kept at 4%, but the overnight loan rate the rate was kept at 4.75%.

In order to fight inflation, interest rates had previously been raised by the ECB’s council for ten consecutive meetings.