ANI
17 Mar 2023, 12:25 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 Sports Sun 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 Sports Sun.
More Information(Photo credit: Wendell Cruz-Imagn Images) Washington and Kelly Olynyk barely got to know one another, as the Wizards dealt the newly...
(Photo credit: Rick Osentoski-Imagn Images) Colt Keith hit a tiebreaking two-run homer in the seventh and the host Detroit Tigers...
(Photo credit: Connor Hamilton-Imagn Images) Gavin McKenna just accelerated the growth and relevance of NCAA men's ice hockey. ...
(Photo credit: Kiyoshi Mio-Imagn Images) Washington Nationals catcher Keibert Ruiz returned to the seven-day concussion list Tuesday...
(Photo credit: Jaime Valdez-Imagn Images) Those looking to watch No. 1 pick Cooper Flagg take on Bronny James in NBA Summer League...
(Photo credit: Albert Cesare/The Enquirer / USA TODAY NETWORK) The Los Angeles Dodgers recalled Alexis Diaz, the former All-Star...
(Photo credit: Jeffrey Becker-Imagn Images) Longtime NFL executive Tim Rooney, the nephew of Pittsburgh Steelers founder Art Rooney...
(Photo credit: Raymond Carlin III-Imagn Images) BYU coach Kalani Sitake plans to let quarterback Jake Retzlaff speak for himself...
(Photo credit: Chris Jones-Imagn Images) Cowboys quarterback Dak Prescott declared himself a 'full go' for training camp and fully...
(Photo credit: Jayne Kamin-Oncea-Imagn Images) Pettis Norman, a tight end on the football field and a civil rights advocate off of...
(Photo credit: Michelle Pemberton/IndyStar / USA TODAY NETWORK via Imagn Images) Bengals quarterback Joe Burrow punted plans to purchase...
(Photo credit: Dale Zanine-Imagn Images) Kirk Cousins believed he had all the facts and with no reason to doubt the Atlanta Falcons'...