DXGE - ECB raises interest rates 25 bps highest level seen since July 2008

2023-05-04 08:23:09 ET

ECB raised its key deposit facility interest rate by 25bps to 3.25% during the April 2023 meeting, pushing it to a fresh high since 2008, as the inflation outlook continues to be too high for too long.

The ECB raised its key interest rates by 25 basis points during its May meeting, indicating a slowing pace of policy tightening. However, borrowing costs have still reached the highest level since July 2008, following seven consecutive rate increases by the ECB.

Policymakers are working to combat high inflation, even amidst ongoing recession risks.

The latest economic data revealed that the inflation rate in the Euro Area rose to 7% in April, with the core rate remaining near March's all-time high at 5.6%. The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 3.75%, 4.00% and 3.25% respectively.

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