European Central Bank board member Dolenc: Falling energy prices may mean no need for an interest rate increase.

European Central Bank Governing Council member Primoz Dolenc said that the decline in energy prices has pushed the Eurozone economy closer to the central bank's baseline scenario and could mean that there is no need for a rate hike. Dolenc stated that although the situation surrounding the Iran war remains volatile and policymakers must remain open-minded, the recent drop in oil and gas prices is more in line with the ECB's baseline scenario rather than its adverse scenario. "For me, the baseline scenario is that this is an exogenous supply shock and medium-term inflation will not rise," Dolenc, who also serves as the Governor of the Bank of Slovenia, said in an interview during the International Monetary Fund spring meetings on Thursday. "In this situation, we will not raise rates." There are still two weeks until the next ECB policy meeting, and officials are still assessing the impact of the war on Eurozone inflation and economic growth. According to sources familiar with the matter, due to the lack of clarity, they currently lean towards keeping monetary policy unchanged.