AA/ Ahmad Hatem
The Governing Council of the European Central Bank (ECB) announced on Thursday an unprecedented increase – since 1999 – in its key rates, by 75 basis points to curb inflation.
In a press release, the Governing Council of the ECB announced that it had decided today to increase the three key ECB interest rates by 75 basis points. The rate on bank deposits at the ECB, reduced from -0.5% to 0% in July, thus rose to 0.75%.
The other two key rates, that applied to banks on main refinancing operations, and that relating to the marginal lending facility will be raised to 1.25% and 1.50% respectively, from September 14, 2022.
“This important measure anticipates the transition from the currently very accommodating level of key rates to levels that will ensure that inflation returns to the ECB’s medium-term target of 2% as soon as possible”, explains the monetary institution of the European Union.
For the period ahead, ECB staff have revised their inflation projections significantly upwards, with price increases now expected to average 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024.
“The Board of Governors plans to continue to raise key interest rates during its next meetings,” the statement continued, stressing that the inflation affecting the euro zone “remains far too high”.
The European Central Bank raised its key interest rates by 0.50 points last July, the first increase since 2011, as part of its measures to fight inflation.
Inflation in the euro zone reached 9.1% in August. Soaring energy and food prices continue to fuel inflation, which is expected to reach a record double-digit level in the coming months.
*Translated from Arabic by Majdi Ismail
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