Thursday, April 7, 2011

European Central Bank Lifts Rate 25bps to 1.25%

The European Central Bank (ECB) increased the main refinancing operations (fixed rate) by 25 basis points to 1.25% from 1.00% previously. The Bank also increased the marginal lending facility and the deposit facility by 25 basis points to 2.00% and 0.50% respectively. The Bank noted "Our decision will contribute to keeping inflation expectations in the euro area firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term.". The move was clearly signaled by the Bank in its previous statement, and in today's decision the Bank also left the door open for further increases, commenting that "We will continue to monitor very closely all developments with respect to upside risks to price stability."


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