“We can probably get out of negative interest rates by the end of the third quarter,” European Central Bank President Christine Lagarde said in a blog post on the European Central Bank website. will pave the way for a rate hike at our July meeting.”
This increase will be the first for the European Central Bank in more than a decade and will raise interest rates from their current, historically low levels.
This includes minus 0.5 on deposits that are charged to banks for placing excess funds with the European Central Bank.
Lagarde has come under increasing pressure from her colleagues at the European Central Bank’s Governing Council to raise interest rates as quickly as possible due to high inflation in the euro area, as consumer prices rose 7.5% in April, a record high and much more higher. target bank 2%.
Behind the new price increase is rising energy prices due to the Russian-Ukrainian conflict, which prompted other central banks to raise interest rates, as well as the US Federal Reserve, which raised them by an unusual 50 basis points in early May. .
Lagarde noted that “any increase above zero will depend on inflation expectations. If the expected rate of inflation appears to stabilize around the European Central Bank’s 2 percent target, the additional increase will be proportional to this,” says Agence France-Presse.
The policymakers of the European Central Bank will make their decision at the meetings on 9 June and 21 July.
Source: El Iktisad
