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According to the Governor of the Banque de France, the solution to inflation is not budgetary, it is “monetary”.
The governor of the Banque de France, François Villeroy de Galhau, invited on Wednesday by franceinfo, is “firmly” committed to “reducing” inflation to 2% by 2024. “The solution to inflation is not budgetary, it is monetary”, emphasizes François Villeroy de Galhau.
“It is our responsibility, the Banque de France and the European Central Bank, to do what is necessary to bring inflation down to 2%. This is the commitment we are making to the French people. “
Francois Villeroy de Galhauat franceinfo
François Villeroy de Galhau calls for “fight”‘inflation. “It goes through the normalization of monetary policy, that is to say bringing interest rates back to more normal conditions”.
“The solution to inflation cannot be budgetary, it cannot be a new ‘Whatever it takes’ because we cannot afford it and then it is not at all effective for fighting inflation. It keeps our energy consumption up”says the Governor of the Banque de France.
He assures that “inflation will remain high until the beginning of next year. Then, barring a new energy shock, it should start to fall because energy prices are no longer rising.” The Governor of the Banque de France points out that France has “the lowest inflation in the euro zone after Malta”.
The Banque de France is currently observing “a form of stability” on the price of oil and “on certain materials, metals and even cereals, the world price is starting to fall”, remarks François Villeroy de Galhau. “On the other hand, there are other prices which continue to rise. I emphasize that inflation is not only higher, but it has become broader in the economy. ‘is broadcast to the service sector, to the goods we buy.”