The European Central Bank (ECB) announced this Thursday that it will raise interest rates again, despite the recent nervousness of the markets in the face of the Credit Suisse crisis and its impact on European banking.

“Inflation is projected to remain too high for too long, therefore the Governing Council decided today raise the three key ECB interest rates by 50 basis pointsin line with its determination to ensure a timely return of inflation to the medium-term target of 2%”, the institution said in a statement.

“The Governing Council decided to increase the three key ECB interest rates by 50 basis points. Accordingly, the interest rate applicable to the main refinancing operations and the interest rates applicable to the marginal lending facility and the marginal deposit will be increased to, respectively, 3.50%, 3.75% and 3.00%, with effects from March 22, 2023.”

The ECB recognizes that there is a “high level of uncertainty”, but says that this uncertainty “reinforces the importance of a data-dependent approach in the Governing Council’s decisions on key rates, which will be determined by the Governing Council’s assessment of the inflation outlook, in the light of the economic and financial data that become available, the dynamics of underlying inflation and the strength of monetary policy transmission”.

Regarding the situation with Credit Suisse, which recorded record falls on the stock exchange this week, the board of the ECB says it is “closely monitoring the current tensions in the market” and says it is “prepared to respond as necessary” to “preserve price stability and financial stability in the Euro area”.

“The euro area banking sector is resilient, boasting strong capital and liquidity positions. The ECB’s set of monetary policy instruments fully allows it to provide, if necessary, support in terms of liquidity to the euro area financial system and preserve the regular transmission of monetary policy”, is advanced in the same statement.

In the latest projections by the ECB, from the beginning of March, inflation was revised downwards, but the data still do not cover recent episodes in world banking, including the failure of US banks Silicon Valley Bank and Signature Bank. already the growth was revised upwards to 1% this year.

[atualizado às 13h26]

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By bfrpx

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