The institution also called for better regulation of cryptocurrencies.
“Less inflation and more stabilization” : the Governor of the Banque de France François Villeroy de Galhau estimated on Thursday that a period “monetary stabilization” opened and that the European Central Bank’s key interest rates would have to peak by the summer. In an attempt to curb inflation, which reached historic levels in 2022, most central banks around the world have drastically raised their key rates, hitherto close to zero.
“After having reached in December a level close to the “neutral interest rate” at 2%, we are entering the second phase towards monetary stabilization: it would be desirable to reach the right “terminal rate” by next summer. , but it is too early to prejudge its level”said the governor in his wishes for the new year. “We will then be ready to stay at this terminal rate for as long as necessary: the speed race for rate hikes in 2022 becomes more of a long-distance race, and the duration will count at least as much as the level”adds François Villeroy de Galhau.
The Governor of the Banque de France has also called for better regulation of cryptocurrencies. “All the disorders of 2022 nourish a simple conviction: it is desirable that France pass as soon as possible to the obligatory approval of the PSAN (digital asset service providers) rather than their mere registration”he said, and this, before the entry into force of the European rules.
François Villeroy de Galhau also wanted more targeted aid concerning energy in particular, in the face of the concerns of the French. Households are still worried about future inflation, even if the rise in consumer prices fell slightly between November and December, falling from 6.2% to 5.9% over one year, according to an initial estimate of the ‘Insee. The Banque de France plans a “peak in the first half” inflation before a decrease “around 4% at the end of this year“and a target of 2%”by the end of 2024 to the end of 2025“.