ECB Raises Deposit Rate to 2.50%, Second Increase This Year
Summary
- The European Central Bank said it raised its rates by 25 basis points 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 leaves the gap between its deposit rate and the U.S. benchmark rate (3.50%-3.75%) and South Korea's benchmark rate (3.00%) in place.
- In its statement, the ECB said the outlook remains uncertain, citing upside risks to inflation and downside risks to economic growth.
Forecast Trend Report by Period
The European Central Bank raised all three of its key policy rates.
After a monetary policy meeting in Berlin on September 10, the ECB said it would raise the deposit rate by 25 basis points to 2.50% from 2.25%. The deposit rate is now at its highest level since April last year.
The ECB also raised the main refinancing rate and the marginal lending rate by 25 basis points each, to 2.65% and 2.90%, respectively.
Following the move, the gap between the ECB's deposit rate, its main policy benchmark, and the U.S. benchmark rate of 3.50% to 3.75% stands at 1.00 to 1.25 percentage points. The gap with South Korea's benchmark rate of 3.00% is 0.50 percentage point.
The increase was the ECB's second since the Iran war erupted in late February. The central bank had previously raised rates in June for the first time since September 2023.
In a statement, the ECB said "the outlook remains uncertain." It added that inflation faces upside risks, while economic growth faces downside risks. At its July monetary policy meeting, the ECB said it would watch for spillover effects from rising energy prices.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul