Daily Management Review

ECB raises interest rate to 4%


At its meeting on June 15, the Governing Council of the European Central Bank increased the base rate by 25 basis points to 4%.

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A 3.5% deposit rate was implemented, and 4.25% - on short-term borrowing. These rates will become effective on June 21.

The decision to increase the rate is justified by the fact that although inflation in the Eurozone is currently declining, it will remain "too high" for "too long" in a statement on the regulator's website.

The ECB’s objective is 2% inflation. The projection for inflation that excludes the cost of energy and food has been increased. 

In 2023, the percentage will be 5.1%; in 2024, 3%; and in 2025, 2.3%. The expected rate of economic growth for the Eurozone has been reduced. The economy is anticipated to expand.

source: ecb.europa.eu