The European Central Bank (ECB) raised this Thursday, as in September, its main reference rates by 0.75 points, to deal with the rise in inflation in the euro zone fueled by the consequences of the war in Ukraine.
The rate that remunerates bank cash not distributed in credit rises to 1.5% and that of short-term refinancing operations to 2%, the ECB detailed in a press release, which “plans to continue raising” its rates in the next months.
With this new rise, the ECB hopes to contain inflation, which reached 9.9% in the euro zone in September in one year, almost five times its target of 2%.
The ECB will reduce the advantages of anti-crisis loans for banks
The European Central Bank has also decided to tighten the conditions in the latest wave of gigantic loans granted to banks at advantageous rates, which are no longer in line with the phase of high inflation.
“Given the unexpected and exceptional acceleration of inflation”, the so-called TLTRO lending system must be “recalibrated”, according to a press release from the ECB. Given the rise in key interest rates, these loans now offer attractive returns on banks’ excess liquidity. Therefore, the rate applied to these loans will be adjusted and banks will be able to repay them earlier.
Source: BFM TV
