ECB’s De Guindos says asset purchases must stop before raising rates

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European Central Bank (ECB) Vice-President Luis de Guindos makes a statement during the second day of the informal meeting of EU economy and finance ministers in Berlin, Germany, on 12 September 2020. Odd Andersen/Pool via REUTERS

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MADRID, Feb 23 (Reuters) – European Central Bank Vice President Luis de Guindos said on Wednesday the institution will first have to end asset purchases before interest rates can rise .

“We will look at the (macroeconomic) data, the projections, then we will readjust asset purchases if necessary and see when an interest rate hike can take place,” De Guindos said at a financial event in Madrid.

Earlier on Wednesday, European Central Bank policy chief Robert Holzmann said the ECB could start raising interest rates before ending its bond-buying program, questioning the view of bank’s long-timer on the sequence of its next policy moves.

As inflation hit new highs in recent months, the ECB recently backtracked on its promise not to raise rates this year, but has long maintained that halting bond purchases comes first, before any increase in interest rates.

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Reporting by Jesús Aguado and Emma Pinedo; edited by Nathan Allen

Our standards: The Thomson Reuters Trust Principles.

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