Interest rate statement by ECB President Lagarde

Christine Lagarde, President of the European Central Bank (ECB), signaled that the ECB will continue to raise interest rates in a statement in Sintra, Portugal today.

Lagarde said the ECB is unlikely to spike interest rates in the near future and should not hesitate to fight inflation. “Unless there is a significant change in outlook, we will continue raising rates in July,” Lagarde said.

“It is unlikely that the central bank will be able to say with much confidence that maximum interest rates have been reached in the near future,” Lagarde said, adding that, for this reason, policies should be decided on a meeting-by-meeting basis and stick to the data.

INTEREST UP TO 22 YEARS

At its last meeting, the ECB raised the three main policy rates by 25 basis points in line with market expectations. The bank raised the demand deposit rate to 3.50 percent, the refinancing rate to 4 percent and the marginal funding rate to 4.25 percent.

The ECB started raising interest rates in July last year after an 11-year hiatus. Thus, the bank increased the interest rate by 400 basis points in total in the 8 meetings it held in 11 months.

ECB officials said inflation will stay high for a long time and raised their inflation forecast to 5.4 percent from 5.3 percent for 2023 and to 3 percent from 2.9 percent for 2024.

The bank lowered its growth forecast from 1 percent to 0.9 percent for 2023, and from 1.7 percent to 1.5 percent for 2024. (SÖZCÜ-REUTERS)