AA/Francfort/Mohammed Hamood Ali al-Ragawi
The European Central Bank (ECB) on Thursday raised its key rates by 50 basis points, their highest level since 2008.
In a press release, the ECB announced that it had raised its interest rates from 2.5% to 3%.
According to the press release, the deposit rate increased from 2% to 2.5%, the refinancing rate to 3% and that of the marginal lending facility to 3.25%.
This is the fifth consecutive increase in rates by the ECB, which has increased them by a total of 250 basis points since July 2022, when they were at minus 0.5%.
The European Central Bank has declared that it will continue to raise its interest rates substantially, at a steady pace, and to keep them at sufficiently restrictive levels, to ensure a rapid return of inflation to its medium-term objective of 2%.
The ECB announced a further increase in its key rates by 50 basis points at the next monetary policy meeting on March 16, 2023.
The Frankfurt institution has indicated that it will then assess the future path of its monetary policy, adding that keeping interest rates at restrictive levels will reduce inflation by curbing demand and avoid the risk of a a persistent upward slide in inflation expectations.
The annual inflation rate in the euro zone (which includes 20 countries) fell in January 2023 for the third consecutive month, to 8.5%, against 9.2% in December, according to estimates by the statistical office of European Union, Eurostat.
The US Federal Reserve (Fed) raised interest rates by 25 basis points, while the Bank of England raised interest rates by 50 basis points, in an attempt to control inflation.
Global inflation has reached its highest level in decades, due to the economic fallout from the Russian-Ukrainian war.
*Translated from Arabic by Majdi Ismail
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