At the ECB Council meeting in Frankfurt, it was also decided to raise the overnight deposit rate to 2% and the overnight lending rate to 2.75%. Both of these rates were also increased by 0.5 percentage points.
The ECB raised interest rates for the fourth consecutive meeting.
All three rates were raised by 0.75 percentage points in the previous two meetings. On the other hand, in the meeting of 21 July, to counter high inflation, the board decided to implement the first increase in interest rates in 11 years, raising rates by 0.5 percentage points.
“Inflation remains too high and forecasts indicate it will remain above the bank’s target for too long,” the board said in a statement released after the meeting. “Interest rates will need to rise significantly at a steady pace.”
As reported, annual inflation in the Eurozone fell to 10% in November, from 10.6% in October, thus registering the first decline in the last 17 months.
However, despite this decline, inflation in the euro area is still ten times higher than the ECB’s target.
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