Martins Kazaks, a member of the European Central Bank Governing Council, urged patience in formulating financial policies and warned that a grave mistake would be easing monetary policy prematurely, leading to a renewed increase in inflation rates.

Kazaks, who is also the Governor of the Central Bank of Latvia, said in statements to Bloomberg Television Network that although it is necessary to start lowering interest rates, the European Central Bank should not rush to initiate this process in order to avoid any major shocks.

Kazaks explained that "this would certainly be worse than waiting a little... We saw in the seventies and eighties that if easing is started too early, there is a risk that inflation will rise again, and then we will have to raise interest rates further."

The European Central Bank decided yesterday, Thursday, to keep the main interest rate unchanged at 4.5%, in the first meeting held this year regarding monetary policy.

The interest rate on deposits at the European Central Bank, which is the rate that credit institutions receive when they deposit money with the bank, is 4%, a record high rate.

The European Central Bank thus ended a long period of zero and negative interest rates in July 2022, and repeatedly raised rates aiming to control the high inflation rate at a time when the Eurozone was emerging from the Corona pandemic.

Ultimately, the Central Bank raised interest rates ten consecutive times before stopping in October last year.