ECB closely monitoring Middle East crisis and its potential global economic impact

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ECB closely monitoring Middle East crisis and its potential global economic impact

European Central Bank (ECB) officials have been closely monitoring the escalating Middle East crisis due to its potential global economic impact. The conflict has triggered concerns among investors, leading to a rise in oil prices. This information was shared by Gabriel Makhlouf during his recent visit to Cyprus, which is serving as an evacuation hub for Western nationals escaping the violence, a situation he termed a "human tragedy".

In response to these developments, the ECB recently hiked key interest rates by 25 basis points. However, they hinted that this might be the last increase for the time being. The bank is also managing a downward trend in eurozone inflation as part of its strategic approach.

Makhlouf's visit to Cyprus involved engagements with CBC Governor Herodotou, Finance Minister Keravnos, business representatives, and university students. The discussions revolved around the geopolitical developments, Eurozone's economic progress, monetary policy discussions, enhancing efficiency in banking and insights on Cyprus and Ireland economies.

He emphasized the importance of monitoring the situation in Israel and other parts of the Middle East due to potential economic impacts. He assured that ECB's monetary policy's potential impact is under close watch but cautioned against drawing premature conclusions. Confidence was expressed in Irish and Cypriot banking systems' resilience, attributing it to international regulations and banking sector reforms.

The need for swift resolutions for geopolitical crises was discussed along with the upcoming ECB meeting in Athens and technical cooperation between Central Banks.

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