The European Central Bank (ECB) decided to keep the interest rates constant in an environment where the Russia-Ukraine war further depressed the already rising prices.
AMb kept its main refinancing rate at 0%, marginal funding facility at 0.25% and deposit rate at -0.50%.
Economists expected that interest rates would be kept constant.
In the decision text, it was pointed out that there would be a faster exit from the asset purchase program. The bank stated that the asset purchase program could be terminated in the third quarter.
It was noteworthy that the statement "The interest rate may be below the current level" was removed in the text of the decision. In addition, the commitment that the asset purchase program will end just before the interest rate hike was not included in this text.
According to Bloomberg Intelligence, which published an analysis before the announcement of the decision, the risks of a slowdown in the normalization path of the ECB increased with the Russia-Ukraine war.
Predicting that the ECB will keep its current monetary policy path for now, Bloomberg Intelligence economists expected that asset purchases would end in the last quarter of the year and the first interest rate hike would be made in December with 25 basis points.
The first reading of consumer inflation in the Euro Zone was 5.8 percent, above the estimates.
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