The environment for the central bank has changed significantly in the past seven days.
(Photo: dpa)
Frankfurt The European Central Bank (ECB) continues to raise interest rates in the euro area. It raises the key interest rate by 0.5 percentage points to 3.5 percent. The currently even more important interest that banks get for their deposits at the ECB will rise from 2.5 to 3 percent. The central bank announced this on Thursday afternoon.
Most experts and investors had expected an increase of this magnitude. ECB boss Christine Lagarde had signaled the move several times in advance.
However, due to the bankruptcy of the Silicon Valley Bank and the turbulence in the banking sector, the environment has changed dramatically in the past seven days. There was therefore also some speculation about a change in plans.
With its decision, the central bank is reacting to the high inflation in the euro area. Central bankers are particularly worried about core inflation adjusted for energy and food. It rose to a record high of 5.6 percent in February.