ECB Hikes Key Interest Rates by Another 75 basis points

October 27, 2022


Effective October 27, 2022, the Governing Council took the decision to raise the three key interest rates set by the European Central Bank (ECB) by 75 basis points. As a result, starting on November 2, 2022, the interest rates on the main refinancing operations, the marginal lending facility, and the deposit facility will all be raised to 2.00%, 2.25%, and 1.50%, respectively.

This is the third major policy rate increase in a row and the Governing Council anticipates raising interest rates further to ensure that inflation reaches its medium-term target of 2% in a timely manner.

In September, inflation in the euro zone reached 9.9% and will stay above the ECB’s target for an extended period as inflationary pressures continued to rise. The monetary policy of the Governing Council aims to reduce demand support and protect against the possibility of a persistent increase in inflation expectations.

Additionally, the Governing Council decided to adjust the interest rates applicable to the third series of targeted longer-term refinancing operations (TLTRO III) from November 23, 2022 and to offer banks additional voluntary early repayment dates. The remuneration of minimum reserves was also set at the ECB’s deposit facility rate in order to more closely align remuneration of minimum reserves held by credit institutions with the Eurosystem with money market conditions.



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