The impact of the European Central Bank's interest rate hikes on financial conditions is "well underway" and rate-setters must be alert to longer lag effects when considering future action, Central Bank Governor Gabriel Makhlouf has said.
Mr Makhlouf is also a member of the ECB's governing council member.
"We must remain alert to the longer lags in the transmission of monetary policy to growth and inflation," the Central Bank Governor said.
" It will be important to assess how monetary policy decisions to date are working through the economy when calibrating further decisions," he added.
The Central Bank chief added that the ECB "must remain steadfast and ready to act as required" to ensure inflation returns to target over the medium-term, and that rates will need to be kept at a restrictive level to dampen demand.
