2023-06-15 14:49:51
The European Central Bank (ECB) raised its main key rates by 0.25 percentage points on Thursday, June 15, an eighth increase in a row, as part of its monetary tightening policy to combat inflation in the euro zone. .
“Inflation is slowing, but is expected to remain too high for too long,” she said in a statement.
The refinancing rate is now at 4.0% and the marginal lending facility rate at 4.25%. The deposit rate, which is the benchmark, reached 3.50%, its highest level since May 2001.
ECB ‘highly likely’ to raise rates in July
After a decade of cheap money, the ECB embarked on an unprecedented round of monetary tightening to counter soaring consumer prices in the wake of Russia’s offensive in Ukraine. By raising rates, central bankers reduce demand for credit and therefore investment and consumption by households and businesses alike, with the consequences of a slowdown in demand and therefore pressure on prices. The ECB has raised interest rates by 4 percentage points since last July.
Many observers expect another quarter-point hike at the July meeting. “It is very likely that we will continue to raise our rates in July,” confirmed ECB President Christine Lagarde after Thursday’s monetary policy meeting. “We still have a long way to go. We haven’t reached our destination,” she added.
In their statement, the guardians of the euro observe that their future decisions “will ensure that the key ECB interest rates are reduced to levels sufficiently restrictive to allow a rapid return of inflation to the medium-term objective. of 2″%. “They will be maintained at these levels for as long as necessary” and the institution will decide based on current data and forecasts.
#Inflation #ECB #raises #rates