Also because of the Ukraine war: Deutsche Bank

In view of the war in Ukraine, the CEO of Deutsche Bank and President of the German Banking Association, Christian Sewing, fears an additional surge in prices and even higher inflation rates.

"Prices will certainly continue to rise, especially for energy and raw materials," Sewing told the "Bild" newspaper.

"We are currently expecting an inflation rate of around five percent for Germany this year," he added.

Inflation will depend heavily on how the war unfolds, Sewing said.

He again called on the European Central Bank (ECB) to reverse interest rate policy.

"In view of the price development, the exit from the negative interest rate policy is still necessary - despite this crisis," said Sewing.

He pointed out that the ECB had numerous other instruments in addition to the key interest rate "to react to possible tensions on the financial markets in a targeted manner".

As an example, he cited "special programs for the purchase of securities, which should be limited in time".

"Risk for German banks manageable"

Inflation in Germany reached its highest level since 1993 at an average of 3.1 percent last year, mainly due to significantly higher energy prices.

In January, consumer prices rose by 4.9 percent compared to the same month last year.

This Tuesday, the Federal Statistical Office will publish an initial estimate for February.

After the exclusion of Russia from the worldwide bank communication system Swift, the bank president sees only few risks for German institutes.

"German banks have sharply reduced their exposure to Russia since 2014," Sewing said.

“For our banking system as a whole, the risk is manageable.

The safety buffers of European banks are higher than ever."

At the same time, the Deutsche Bank boss emphasized that Russia's Swift exclusion would not end the war in Ukraine.

"That would be the wrong expectation." The point is that "aggression that violates international law and the attack on a country in the 21st century must not go unnoticed."

He assumes that "the sanctions will hit the Russian economy hard," said Sewing. This is shown by the rapid move by the Russian central bank on Monday to double interest rates to 20 percent.