The European Central Bank raised its benchmark interest rate by 50 basis points on Thursday, bringing it to 3%.
The
increase comes despite recent turmoil and volatility in the global
banking system following the collapse of Silicon Valley Bank and
concerns over Credit Suisse.
- ECB
President Christine Lagarde signaled that some council members wanted to
stop increasing rates until there was more clarity on the current
situation.
- The majority of the council still voted for the planned 0.5% increase to show confidence in the eurozone banking system.
- The ECB said that eurozone banks were resilient and had strong capital and liquidity positions.
- The central bank added that it had the tools to provide financial support if needed.
- The U.S. Federal Reserve is expected to meet next week.
- Fed Chair Jerome Powell had previously signaled future rate hikes following the Jan. 31-Feb.1 meeting.
- Last month, the U.S. central raised rates by 0.25%., bringing its benchmark interest rate to 4.5% to 4.75%.
