ECB cuts interest rates for banks – central banks

2023-08-02 10:00:00

Times of rising interest rates are usually lucrative for banks, because business with loans and deposits usually becomes more profitable. Seen in this light, the key interest rate increase decided by the European Central Bank (ECB) last week to 4.25 percent was good news for financial institutions – albeit with a bitter followingtaste. At the same time, the central bank announced that it would tighten its interest rate terms: from September 20, interest will no longer be paid on the so-called minimum reserve of the banks at the central bank. It is currently being compensated with the interest on bank deposits at the central bank, which the ECB has raised to 3.75 percent.

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