ECB Raises Deposit Rate to 2.50%, Second Increase This Year
Summary
- The European Central Bank said it raised its rates by 0.25 percentage point each, taking the deposit rate to 2.50%, the main refinancing rate to 2.65%, and the marginal lending rate to 2.90%.
- The ECB said the move brought the gap between its deposit rate and the US benchmark rate (3.50%-3.75%) to 1.00-1.25 percentage points, while the gap with South Korea's benchmark rate (3.00%) was 0.50 percentage point.
- The ECB said there are upside risks to inflation and downside risks to economic growth, and that it would watch the spillover effects of rising energy prices.
Forecast Trend Report by Period
The European Central Bank raised all three of its key policy rates.
Following a monetary policy meeting in Berlin on September 10, the ECB said it would raise its deposit rate by 0.25 percentage point to 2.50% from 2.25%. The deposit rate is now at its highest level since April last year.
The ECB also increased its main refinancing rate and marginal lending rate by 0.25 percentage point each, to 2.65% and 2.90%, respectively.
The move brought the gap between the ECB's deposit rate, its main policy benchmark, and the US benchmark rate of 3.50% to 3.75% to 1.00 to 1.25 percentage points. The gap with South Korea's benchmark rate of 3.00% is 0.50 percentage point.
The ECB's latest increase was its second since the Iran war broke out in late February. The central bank previously raised rates in June for the first time since September 2023.
"The outlook remains uncertain," the ECB said in a statement. It added that there are upside risks to inflation and downside risks to economic growth.
At its July monetary policy meeting, the ECB said it would watch the spillover effects of rising energy prices.
