The European Central Bank on Thursday raised its three main interest rates by 0.25%, after analysts had been divided on whether the eurozone’s central bank would issue a 10th consecutive hike or pause the increases.
However, as it announced its decision, the lender again signaled that it believed it had increased rates sufficiently to most likely tame inflation, hinting that its run of hikes might soon cease.
“Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target,” the ECB said in a statement.
“The Governing Council’s future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary,” it added.
Watch the ECB press conference live: President Christine @Lagarde explains today’s monetary policy decisions. https://t.co/r5QLK64b68
— European Central Bank (@ecb) September 14, 2023
The changes put the main refinancing operations rate — the fee ordinarily charged to commercial lenders to borrow money and arguably the most important of the three — at 4.25%.
The deposit facility, paid to lenders that deposit funds with the ECB on a sh
rt-term basis, rose to 4%.
And the marginal lending facility, paid by commercial lenders for short-term liquidity injections, was put at 4.5%.
