The ECB raises rates by 0.5 points, to 3.5%, the highest since 2008, despite financial tensions

March 16 () –

The Governing Council of the European Central Bank (ECB) has decided to raise interest rates by 50 basis points, as it had anticipated it would do, so that the interest rate for its refinancing operations will stand at 3.50 %, while the deposit rate will reach 3% and the loan facility rate will reach 3.75%.

With this sixth consecutive rise in the price of money, which has reached its highest level since October 2008, the ECB maintains the pace of normalization of its monetary policy, despite the turbulence in the financial sector, after the intervention in the United States of two banking entities last weekend and the stock market collapse of European banks due to doubts about Credit Suisse.

In this way and after the increases of another 50 basis points in February and December 2022, as well as the two increases of 75 basis points undertaken at the meetings held in October and September last year, after an initial increase of half a percentage point. in July 2022, the ECB has raised the price of money by 350 basis points during the current cycle of increases.

The year-on-year inflation rate in the euro area stood at 8.5% in February, which implies a drop of one tenth compared to the data for January, while the core rate, which excludes the effect of energy and food, climbed to a record 5.6%.

On its side, according to the latest data from Eurostat, the rate of expansion of the euro zone was interrupted in the fourth quarter of 2022, when the region’s gross domestic product (GDP) stagnated compared to the previous three months, when growth was 0.4%, while compared to the fourth quarter of 2021, growth in the Eurozone was 1.8%.