The president of the European Central Bank (ECB), Christine Lagarde, admitted this Thursday that “some” governors expressed, in this morning’s meeting, their preference for a pause in the increase in interest rates, but a “solid majority” supported the new increase of 25 basis points.
At the press conference after the meeting of the ECB Board of Governors, Christine Lagarde stated that “some governors” preferred to keep interest rates unchanged at this Thursday’s meeting and reserve the decision for when more data is available.
However, a “solid majority” supported the new increase announced this Thursday, which placed the deposit rate at the highest historical level in the euro zone.
Even so, he assured that the debate in the Council of Governors was not “antagonistic” and was based on the latest macroeconomic data.
“We really dug into the numbers and analysis,” he said.
The ECB announced that the interest rate applicable to the permanent deposit facility has increased to 4.00%, that is, the amount that banks receive for depositing money with the central bank.
The interest rate on the main financing operations and the interest rate applicable to the permanent liquidity provision line (which defines the cost of loans from central banks to banks) increased to 4.5% and 4 .75%, respectively.
The increase takes effect from September 20, 2023.
“Inflation continues to fall, but it is still expected to remain too high for too long,” highlighted the president of the ECB.
This was the tenth consecutive interest rate hike by the central bank, since July last year, the fastest rate increase cycle in the history of the euro area.
Source: TSF
