European Central Bank Governing Council member Primoz Dolenc stated that falling energy prices have steered the eurozone economy back toward the bank's baseline scenario, potentially indicating that further interest rate increases are unnecessary.

Dolenc noted that while the situation surrounding the conflict in the Middle East remains volatile and policymakers must stay open-minded, recent declines in oil and gas prices following ceasefire developments align more closely with the ECB's baseline outlook than with its adverse scenario.

"For me, the baseline scenario is that this is an exogenous supply shock, and inflation will not rise in the medium term," said Dolenc, who also serves as the governor of Slovenia's central bank, during an interview on the sidelines of the International Monetary Fund's spring meetings on Thursday. "In this case, we would not raise interest rates."

With the ECB's next policy meeting two weeks away, officials are still assessing the impact of the conflict on eurozone inflation and economic growth. According to informed sources, the lack of clarity has led policymakers to currently favor maintaining the existing monetary policy stance.