The new interest rates will come into effect from February 8, 2023.

The Governing Council of the European Central Bank (ECB) today decided to raise the three key interest rates by 50 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 3.00 per cent, 3.25 per cent and 2.50 per cent respectively.

“The Governing Council will stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to its 2 per cent medium-term target. Accordingly, the Governing Council today decided to raise the three key ECB interest rates by 50 basis points and it expects to raise them further,” the ECB said in its press release on monetary policy decisions.

In view of the underlying inflation pressures, the Governing Council intends to raise interest rates by another 50 basis points at its next monetary policy meeting in March and it will then evaluate the subsequent path of its monetary policy, the ECB said.

“Keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations. In any event, the Governing Council’s future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach,” the bank stated.

The Governing Council today also decided on the modalities for reducing the Eurosystem’s holdings of securities under the Asset Purchase Programme (APP). As announced in December, the APP portfolio will decline by €15 billion per month on average from the beginning of March until the end of June 2023, and the subsequent pace of portfolio reduction will be determined over time.

Fibre2Fashion News Desk (RKS)