Forex: The European Central Bank's decision to raise its key interest rate was appropriate given the economic situation, and it's not clear monetary policy is restricting growth, Dutch Finance Minister Wouter Bos said Tuesday.
Bos was speaking to reporters as he arrived at a regular, monthly meeting of finance ministers from the 27 members of the European Union.
With the euro zone's annual rate of inflation rising to 4% in June from 3.7% in May, the ECB Thursday raised its key interest rate to 4.25% from 4.0%, its first move since June 2007.
The rate hike game as business surveys and economic data releases indicated the economy was slowing sharply from a strong first-quarter performance.
"There are no signs of a recession,," he said. "We don't feel we're in the face of a recession. We're in a slowdown.
Bos said the ECB's rate hike "was the best thing to do under the current circumstances." And asked if the ECB's current key rate was restrictive, Bos said "nobody knows."
Also arriving at the meeting, Slovenian Finance Minister Andrej Bajuk said the euro-zone economy has slowed significantly in the second quarter.
But he said he is confidence the ECB hike was "a step in the right direction" and said euro-zone governments shared the central bank's concern about rising inflation.
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