ECB Raises Interest Rate by 75 Basis Points
Posted on 09/08/2022
Inflation in the euro zone hit 9.1% in August 2022. Coming in late versus other Western central banks, the European Central Bank (ECB) announced a 75 basis point interest rate rise, taking its benchmark deposit rate to 0.75%. The 75 basis point rate hike is the largest in the ECB’s history.
“This major step frontloads the transition from the prevailing highly accommodative level of policy rates towards levels that will ensure the timely return of inflation to the ECB’s 2% medium-term target,” the ECB said in a statement.
ECB added it “expects to raise interest rates further, because inflation remains far too high and is likely to stay above target for an extended period.”
The Governing Council decided to raise the three key ECB interest rates by 75 basis points. Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 1.25%, 1.50% and 0.75% respectively, with effect from September 14, 2022.
Current policy rates:
New Zealand 3%
Euro Area 0.75%