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 Scotland Star 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 Scotland Star.
More InformationDUBLIN, Ireland: The local media is reporting that US President Joe Biden will visit Ireland from April 11 until April ...
Inflation and surging lending costs have dented private spending, an official report indicatesRetail sales in Sweden plunged the most on ...
Several members of the military bloc are backing EU president's candidacy, a diplomatic source told the outletEuropean Commission President Ursula ...
Foreign travel ?takes a fair amount out of? the 80-year-old US president, the newspaper's source saysUS President Joe Biden will ...
© Provided by Xinhua The U.S. government "prioritizes fossil fuel profits over preventing climate breakdown; it prioritizes private medical companies ...
New developments: A new $2.6 billion U.S. military aid package that could include air surveillance radars, anti-tank rockets and fuel ...
HANOI, Vietnam: Tensions were again increasing off the coast of Vietnam as Hanoi ordered its navy to shadow a Chinese ...
In Warsaw last February, President Joe Biden condemned the lawless Russian invasion of Ukraine: "The idea that over 100,000 forces ...
TOKYO, Japan: Fears over intensifying Chinese military activity directed towards Taiwan could escalate into war have prompted Japan, the United ...
TEGUCIGALPA, Honduras: After Honduran President Xiomara Castro severed ties with Taiwan in favor of China to gain more investment and ...
NEW YORK, New York - A Manhattan grand jury has indicted Former U.S. President Donald Trump for his role in ...
MEMPHIS, Tennessee: Tennessee authorities are slowly releasing information about a weekend car crash on a freeway that killed six young ...