ANI
17 Mar 2023, 16:55 GMT+10
Frankfurt [Germany], March 17 (ANI): The European Central Bank raised interest rates by a half-percentage point (0.5 or 50 basis points), The Wall Street Journal reported.
The central bank also promised emergency support for eurozone banks if needed, showing the policymakers' balancing act as they seek to combat high inflation without aggravating strains in the financial systemThe ECB said in a statement that it would increase its key rate to 3 per cent, following consecutive half-point rate increases in February and December. The 50 basis points (bps) rise surprised analysts who had expected a smaller uptick given the tense market situation after the collapse of Silicon Valley Bank, WSJ said.
At a news conference on Thursday, ECB President Christine Lagarde signalled the bank would be cautious about further rate increases, while stressing it stood ready to provide fresh liquidity to banks. Policymakers will make future rate decisions based on coming economic data, she said, a change from previously announcing plans for rate increases months in advance.
"It's not business as usual," Lagarde said. "It is not possible at this point in time...to determine what the path will be going forward."European stock markets rallied while government bonds gyrated following the announcements, according to WSJ. Analysts said the moves suggested interest rates would be lower than expected, with markets now pricing a peak ECB rate just above 3 per cent, down from about 4 per cent one week ago.
WSJ said the yield on the 10-year German bund declined to 2.132 per cent from 2.193 per cent before the release and then rose to 2.260 per cent.
WSJ said the ECB's decision provides an early glimpse into how major central banks, including the Federal Reserve, might respond to recent signs of market distress that started with the collapse of SVB and a second large US bank last week.
Both the Fed and the Bank of England are set to hold their policy meetings next week.
The ECB decision to push ahead with its pre-announced rate rise suggests that the central bank, at least, still sees pushing down high and sticky inflation in the eurozone as its priority, WSJ said. (ANI)
Get a daily dose of Greek Herald news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Greek Herald.
More InformationNEW YORK CITY, New York: Bloomberg News has reported that New Jersey-based Valley National Bancorp is bidding to purchase Silicon ...
DUBLIN, Ireland: US pharmaceutical giant Eli Lilly has said it will build a $1bn medicine manufacturing site in Limerick. Lily ...
BEIJING, California: As the world's second-largest economy is still struggling to fully recover from the long-term effects of COVID-19, most ...
NEW YORK CITY, New York: Deposits at small U.S. banks throughout the country dropped the most since 2007 after the ...
DETROIT, Michigan: In a briefing for investors and analysts this week, Ford Motor Co. reported that while its electric vehicle ...
LONDON, England: Reuters has reported that struggling Virgin Orbit, owned by billionaire Richard Branson, is nearing a $200-million investment deal ...
Pink Floyd co-founder Roger Waters criticized the city of Frankfurt for canceling his concert and vowed to take legal actionBritish ...
© Provided by Xinhua URUMQI, March 29 (Xinhua) -- When speaking about famous products from China's Xinjiang Uygur Autonomous Region, ...
Elena Rybakina is closing in on a small piece of tennis history as she heads to the semifinals of the ...
The AUKUS submarine announcement earlier this month reignited a long-running debate about how to best preserve Australia's sovereignty.The announcement addressed ...
Israel will not tolerate meddling in its internal affairs, even from the ?best of friends,? the PM saidIsraeli Prime Minister ...
More than a year after the Russian invasion of Ukraine, a Justice Department task force set up to enforce U.S. ...