Bank to raise interest rates significantly at steady pace to ensure inflation returns to its medium-term target of 2%
The European Central Bank (ECB) on Thursday raised interest rates by 50 basis points, the fifth major hike in a row, meeting market forecast.
The rates on the main refinancing operations, the marginal lending facility and the deposit facility rose to 3.00%, 3.25% and 2.50% respectively, with effect from Feb. 8, the bank said in a statement.
The bank will continue to raise interest rates significantly at a steady pace to ensure that inflation returns to its medium-term target of 2%, said the statement.
The ECB expects to raise the three interest rates further,it noted.
In the view of underlying inflation pressures, the bank intends to raise interest rates by another 50 basis points at its next monetary policy meeting in March and it will then evaluate subsequent path of its monetary policy, said.
In January, the eurozone’s annual inflation rate fell to 8.5% from 9.2% in December, as energy prices decreased, according to preliminary data.
The ECB also decided on the modalities for reducing the eurosystem’s holdings of securities under the asset purchase program.