European Central Bank (ECB) Governing Council member Isabel Schnabel said on Tuesday that restrictive monetary policy stance will benefit society over the medium to long run by restoring price stability.

Key takeaways

"Inflation will not subside by itself."

"It would be misleading to use higher interest rates as a scapegoat for a further delay in the green transition."

"Financing conditions will need to become restrictive."

"Green targeted lending operations, for example, could be an instrument but they are not an option for the immediate future."

"Systematic greening of the ECB's collateral framework is therefore an important tool."

Market reaction

EUR/USD showed no immediate reaction to these comments and was last seen posting small daily gains at 1.0745.