The European Central Bank (ECB) has convened to raise three of its key interest rates by 50bps (0.5%), fueled by the persistence in the inflation numbers reported by the bloc. Christine Lagarde, president of the institution, stated that the banking sector in Europe was resilient and that the institution was ready to provide liquidity if necessary.
European Central Bank Hikes Rates in Battle Against Inflation
The European Central Bank (ECB) has decided to keep raising interest rates in its war against inflation. On March 16, the institution announced a hike of 50 basis points (bps) in its three key interest rates, taking its main refinancing rates and the rates on the marginal lending facility and the deposit facility to 3.50%, 3.75%, and 3.00% respectively, effective March 22.
Christine Lagarde, president of the ECB, cited inflation as the main cause of this hike, stating that “inflation is projected to remain too high for too long.” While the inflation numbers have been falling, going from 9.2% in December to 8.5% in February, the goal of the institution is to return to a steady 2%. The ECB predicts that it will come close to this goal in 2025, expecting inflation to come down to 2.2% by that time.
The recent decline was…