The Bundesbank President supported the interest rate hike by half a percentage point and the launch of the new crisis instrument on Thursday.
(Photo: dpa)
Frankfurt Bundesbank President Joachim Nagel advocates further interest rate hikes. After the European Central Bank’s historic decision on Thursday, Nagel demands: “The normalization of monetary policy must continue – and with it the process of interest rate increases.”
On Thursday, the European Central Bank raised interest rates in the euro area for the first time in around eleven years. Contrary to expectations, in the fight against high inflation, which reached a record high of 8.6 percent in the euro area in June, it decided to take a step of half a percentage point. ECB President Christine Lagarde had originally promised an increase of just a quarter of a percentage point.
The official key interest rate is thus 0.5 percent, and the deposit rate, which is currently even more important, is zero percent. Banks pay this rate for excess liquidity that they hold with the central bank.
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