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 Africa Leader 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 Africa Leader.
More InformationEVERGLADES, Florida: Over the weekend, a diverse coalition of environmental activists, Native American leaders, and residents gathered...
BEIJING, China: China's national soccer team may struggle to stir excitement, but its humanoid robots are drawing cheers — and not...
]LONDON, U.K.: A World Health Organization (WHO) expert group investigating the origins of the COVID-19 pandemic released its final...
DOVER, Delaware: California Governor Gavin Newsom has taken legal aim at Fox News, accusing the network of deliberately distorting...
FRANKFURT, Germany: Germany has become the latest country to challenge Chinese AI firm DeepSeek over its data practices, as pressure...
TORONTO, Canada: Harvard University and the University of Toronto have created a backup plan to ensure Harvard graduate students continue...
NEW YORK, New York - Global stock indices closed with divergent performances on Tuesday, as investors weighed corporate earnings, central...
TORONTO, Canada: Canadian Prime Minister Mark Carney announced late on June 29 that trade negotiations with the U.S. have recommenced...
Vancouver, Canada: A high-stakes legal showdown is brewing in the world of athleisure. Lululemon, the Canadian brand known for its...
LONDON, U.K.: British oil giant Shell has denied reports that it is in talks to acquire rival oil company BP. The Wall Street Journal...
NEW YORK, New York - U.S. stock markets closed firmly in positive territory to start the week Monday, with the S&P 500 and Dow Jones...
WASHINGTON, D.C.: On Friday, President Donald Trump announced that he was halting trade discussions with Canada due to its decision...