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Reuters
5 days ago
- Business
- Reuters
Portugal to decide next week on future of central bank chief
LISBON, July 18 (Reuters) - The Portuguese government will decide next week whether to replace or reappoint Bank of Portugal Governor Mario Centeno, whose five-year term ends on Saturday, Finance Minister Joaquim Miranda Sarmento said on Friday. Centeno has been the target of frequent criticism from the political right, now in power, for moving from his role as finance minister in a previous Socialist administration to the central bank in 2020, a move detractors said undermined the institution's independence. Miranda Sarmento has previously said the cabinet would consider whether to reappoint Centeno, who has been a vocal so-called "dove" favouring looser monetary policy at the European Central Bank, or replace him towards the end of his term. Friday's cabinet meeting ended without a decision, however. The minister gave no further comment on the likelihood of Centeno being replaced after months of speculation that centre-right Prime Minister Luis Montenegro was looking for a new central bank chief, despite Centeno's strong European credentials at the ECB and as Eurogroup president in 2018-2020. The central bank declined to comment. Centeno has previously said he is ready to continue leading the institution. Central bank governors are proposed by the finance minister and nominated by the cabinet for a five-year term and can be reappointed once. The nominee must submit to questioning by a parliamentary committee - which has no power to block the nomination - before the government can officially appoint him or her. Portugal's parliament began its summer recess until September on Thursday, although committees can still hold hearings through next Friday. It is not uncommon for heads of regulatory bodies in Portugal to remain in office months after their terms expire. Filipe Garcia, head of Informacao de Mercados Financeiros consultants, said the fact that the government had not denied speculation that Montenegro sought to replace Centeno suggested that his days at the helm of the central bank were numbered. Several names of potential successors have circulated in Portuguese media recently, including the Vice President of the Federal Reserve Bank of New York, Joao Cabral dos Santos, and former CEO of Portugal's Novo Banco, Antonio Ramalho.
Reuters
5 days ago
- Business
- Reuters
Portugal's government postpones decision on central bank chief's future
LISBON, July 18 (Reuters) - The Portuguese government has postponed until next week an expected decision on the potential replacement of Mario Centeno as Bank of Portugal governor, whose five-year term ends on Saturday, the finance minister said on Friday. Centeno has been the target of frequent criticism from the political right, now in power, for moving from his role as finance minister in a previous Socialist administration to the central bank in 2020, a move detractors said undermined the institution's independence. Finance Minister Joaquim Sarmento has previously said the cabinet would consider whether to reappoint Centeno, an outspoken monetary policy dove at the European Central Bank, or replace him towards the end of his term. Friday's cabinet meeting ended without a decision, however. The minister gave no further comment on the likelihood of Centeno being replaced. Central bank governors are proposed by the finance minister and nominated by the cabinet for a five-year term and can be reappointed once. The nominee must submit to questioning by a parliamentary committee, which however has no power to block the nomination, before the government can officially appoint him or her. Portugal's parliament began its summer recess until September on Thursday, although committees can still hold hearings through next Friday.
Zawya
18-06-2025
- Business
- Zawya
ECB to keep flexible approach as Israel-Iran war heightens risks, Panetta says
The European Central Bank will keep a flexible approach to monetary policy decisions against a backdrop where the conflict between Israel and Iran has compounded risks from Washington's trade policy, a top policymaker said on Wednesday. ECB Governing Council member Fabio Panetta, who heads Italy's central bank, said euro zone inflation was likely to remain below the 2% target for an extended period, against a "persistently weak" economy, based on current projections. Speaking on the sidelines of a separate event in Milan, fellow ECB policymaker and Bank of Portugal Governor Mario Centeno said the weakness of the euro zone economy was worrying and posed a threat to the ECB's inflation target. Data released on Wednesday by Eurostat confirmed that consumer prices rose 1.9% in May from a year ago. Panetta, at a Milan banking conference, pointed to "substantial and difficult-to-quantify risks" for the economic outlook stemming from the U.S. trade policy and the situation in the Middle East. "Against this backdrop, the ECB's Governing Council, at its most recent meeting, reaffirmed a flexible approach, keeping its options open," he said. "It will continue to take decisions on a meeting-by-meeting basis, without pre-committing to a defined course for monetary policy." The ECB signalled a pause in policy easing this month despite projections showing price growth dipping below its 2% target temporarily due to the strong euro and low oil prices, reviving worries that the ultra-low inflation environment of the pre-pandemic decade could return. "We are very worried about growth in Europe because it's not coming, and if it's not coming inflation won't be at 2%," Centeno told reporters. "We need a stronger economy to be compatible with 2% inflation, that's my main position," he said on the sidelines of the Young Factor conference in Milan.
Reuters
21-05-2025
- Business
- Reuters
ECB's Centeno: rate cuts below neutral level may be needed to keep inflation on target
LISBON, May 21 (Reuters) - The European Central Bank may need to cut its key interest rate below the neutral level of 1.5%-2% to prevent inflation from falling below its 2% target in a frail economic setting, ECB policymaker Mario Centeno told a news briefing on Wednesday. "We cannot run the risk of having a monetary policy that puts the inflation rate below the target of 2%," he said after presenting the Bank of Portugal's financial stability report. The ECB interest rate, "in order to be able to keep inflation at the target of 2%, may have to come below the natural rate", he added, estimating the latter to be in the range of 1.5% to 2%. In the face of a more uncertain environment due to the global trade tensions, "we must maintain an increasingly predictable approach and not take steps that create more uncertainty", he said, without specifying if the ECB should cut its rates again at its next meeting in June.
