ECB Raises Key Interest Rate by 0.5%p to 3%... "Likely to Increase Again in March"

[Asia Economy Reporter Naju-seok] The European Central Bank (ECB) raised its key interest rate by 0.5 percentage points on the 2nd (local time).

With this, the ECB key interest rate reached 3%. The deposit rate and marginal lending rate also increased by 0.5% each, to 2.5% and 3.25%, respectively.

The current key interest rate is the highest level since the 2008 financial crisis.

The ECB also made it clear that the interest rate hike trend will continue. The ECB's Governing Council stated in a press release, "A steady pace of substantial interest rate increases will be maintained." This suggests that the key interest rate could be raised by another 0.5 percentage points in March.

Following the first 0.5 percentage point increase (big step) in 11 years in July last year, the ECB implemented two consecutive 0.75 percentage point hikes (giant steps) in September and October last year, and then continued with two more consecutive big steps, raising rates five times in a row.

[Image source=Yonhap News]

Christine Lagarde, President of the ECB, indicated at the December meeting last year that the interest rate hike trend could continue to lower the medium-term inflation target to 2%.

The inflation rate in the Eurozone recorded 9.2%, but fell to 8.5% in January this year.