(New York = Yonhap Infomax) Correspondent Yoon Young-sook = The European Central Bank (ECB) raised the policy rate by 75 basis points.
In a statement released on the 8th (local time), the ECB raised the deposit rate, the main policy interest rate, from 0% to 0.75%. In July, the rate hike was increased to 75bp, just over a month following the era of negative interest rates came to an end with a 50bp rate hike.
The ECB raised the refi rate from 0.50% to 1.25% and the marginal loan rate from 0.75% to 1.50%.
The ECB raised the benchmark interest rate by 50 basis points in July, the first rate hike in 11 years.
However, as the Eurozone’s Consumer Price Index (CPI) rose 9.1% in August from the same month last year, the possibility of an unusually large interest rate hike has been discussed.
It is interpreted that the interest rate hike was given priority over concerns regarding a recession in the judgment that high-intensity austerity measures should be implemented early to prevent high inflation amid the deepening energy crisis in Europe.
“These major measures accelerate implementation to ensure that the current very accommodative policy rate returns to the ECB’s medium-term inflation target of 2% in time,” the ECB said in a statement.
The ECB also said it expects to see further hikes in interest rates as “inflation remains at too high a level and is expected to exceed its long-term target”.
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