European Central Bank (ECB) President Christine Lagarde admitted on Thursday that “some” governors expressed a preference for a pause in rate hikes at this morning’s meeting, but that a “solid majority” supported the new rate. increase by 25 basis points.
At the press conference after the meeting of the ECB Board of Governors, Christine Lagarde said that “some governors” preferred to leave interest rates unchanged at today’s meeting and reserve the decision for when more data is available.
However, a “solid majority” backed the new hike announced today, which took deposit rates to their highest level ever in the eurozone.
However, he assured that the debate in the Governing Council was not “antagonistic” and was based on the latest macroeconomic data.
“We’re really digging into the numbers and the analysis,” he said.
The ECB announced that the interest rate for the standing deposit facility has risen to 4.00%, or the amount banks receive for depositing money with the central bank.
The interest rate on the main refinancing operations and the interest rate on the permanent liquidity provision (which determines the cost of loans from central banks to banks) rose to 4.5% and 4.75% respectively.
The increase will take effect from September 20, 2023.
“Inflation continues to decline, but is expected to remain too high for too long,” the ECB president emphasized.
This was the tenth consecutive rate hike by the central bank since July last year, the fastest rising cycle in the history of the eurozone.