Daily Management Review

ECB raises rates for the ninth time in a row


It was the ninth consecutive rate increase by the European Central Bank.

European Central Bank via flickr
European Central Bank via flickr
According to the regulator's website, the European Central Bank increased three important rates by 25 basis points. The marginal lending facility rate will be 4.5% starting on August 2, the key refinancing rate will be 4.25%, and the deposit facility rate will be 3.75%.

The ECB has raised interest rates nine times in a row. Rates on the deposit facility and primary refinancing operations hit their highest levels since 2000. The ECB has increased rates a total of 425 basis points since June 2022, according to the newspaper.

The regulator anticipates that while inflation is declining, it will continue to be excessively high for an extended period of time. The ECB wants to keep pushing inflation toward its 2% objective.

Additionally, the ECB eliminated the interest on the minimal reserve requirement and set it to 0%. The regulator claims that doing this will retain the current level of control over the direction of monetary policy and guarantee that decisions about interest rates are communicated to the money markets.

source: reuters.com