FRANKFURT, Nov. 18 (Xinhua) -- The European Central Bank (ECB) President Christine Lagarde on Friday reiterated the central bank's determination to fight record high inflation, but promised to reduce its balance sheet "moderately."
The ECB will raise rates to a level that is expected to bring the euro area's inflation back to its two percent medium-term target in time, Lagarde said Friday at the "Frankfurt European Banking Congress," one of Europe's most important gatherings in banking and finance sectors.
Lagarde also warned of rising risk of recession in the bloc, even if "the latest data on gross domestic product growth had surprised on the upside."
In December, Lagarde said the governing council will set the main principles for reducing bond holdings.
"In parallel, policy instruments to preserve the orderly transmission of monetary policy will be maintained," Lagarde noted, referring to the pandemic emergency purchase program (PEPP) and the transmission protection instrument (TPI).
The ECB's balance sheet, swollen over the years by billions in securities purchases, must be normalized in a "measured and predictable" way, she said. ■