The main refinancing rate has been raised to 2.40%. The deposit rate (the key policy benchmark) has been raised to 2.25%. The marginal lending rate has risen to 2.65%.
For businesses and households in the eurozone, this decision means an inevitable increase in the cost of mortgages and commercial loans.
At a press conference, ECB President Christine Lagarde stated that the decision to raise rates was a necessary signal to prevent inflation from taking root. She emphasized that the war in the Middle East is causing a severe energy price shock, which has already begun to spread to other sectors of the economy.
The full impact of the conflict on inflation and GDP will depend on the duration and intensity of the energy shock, as well as the scale of its secondary effects, the ECB president noted.
The central banker refrained from making far-reaching plans. The ECB is not making any firm commitments regarding the future path of interest rates. Decisions will be made based on incoming data from meeting to meeting.
