The central bank for the 20 countries that share the euro lifted its deposit rate to 3%, the highest level since late 2008
ECB president Christine Lagarde. Picture: REUTERS
In line with its often-repeated guidance, the central bank for the 20 countries that share the euro lifted its deposit rate to 3%, the highest level since late 2008, as inflation is seen overshooting its 2% target through 2025. But the statement offered no commitments for the future, despite previous calls by a long list of policymakers for more big moves in the fight against inflation.
The euro and bond yields edged up after the move. Earlier, after days of turmoil in markets, financial investors had seen a 50% chance of a smaller, 25 basis point move by the ECB and dialled down expectations for future moves. The key worry for the ECB is that monetary policy works via the banking system, and a full blown financial crisis would make its policy ineffective.
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