ECB's Centeno considers eurozone economy weak and in need of stimulus

According to Mario Centeno, representative of the European Central Bank (ECB) and head of the Portugal’s financial regulator, the eurozone economy is “weak” and needs “further stimulus” from the region's central bank. The official shared this point of view in an interview with La Stampa newspaper.

In early June, the ECB cut interest rates for the eighth time in a year to support the bloc's economic recovery. However, many of the regulator's officials have explicitly signaled their intention to take a pause in the monetary easing cycle in the nearest future.

However, Centeno, whose term as Portugal's central bank governor will end before the next ECB meeting scheduled for July 23-24, is advocating further rate cuts.

According to him, borrowing costs should be consistent with the rate of economic development, which ensures stable inflation at 2%. As Centeno sees it today, the economic situation in the eurozone does not fall under this description—supply and demand conditions are still too weak to return to target levels without additional stimulus.

As should be noted, Centeno is known for his dovish stance and often favors easier monetary policy conditions.