Lagarde says euro-area economy is resilient, digital euro imminent

what happened

ECB President Christine Lagarde said September's 3.8% euro-area inflation rate largely reflected high energy costs, which the bank expects to ease next year. She added that an energy shock is likely to keep inflation above the ECB's target until the first half of 2027, so a measured policy response remains appropriate. Her remarks came in a statement delivered on Saturday at the IMF Annual Meetings, according to Cointelegraph.

Lagarde also said the ECB is preparing a digital euro to complement cash for everyday payments. In her words, the new instrument will further stimulate innovation and competition in retail payments while public and private solutions coexist.

Cointelegraph also recalled that in September the ECB launched Pontes, a system that lets institutions settle wholesale tokenized assets in central bank money. Full implementation is expected by 2028.

why it matters

Lagarde's comments suggest the ECB is in no hurry to change rates over energy-driven inflation, which matters for the euro and rate expectations. The digital euro and Pontes also add a central-bank alternative to stablecoins in European settlement.

market impact

Euro: a cautious ECB supports rate expectations and shapes the outlook for EUR/USD

tags

instruments