European Central Bank , Raises Interest Rates Again.
Reuters reports that interest rates were raised for the third consecutive time on Oct. 27.
The interest rate that the European Central Bank (ECB) pays on bank deposits has been increased by 75 basis points.
Now sitting at 1.5%, that's the
highest it's been since 2009.
The Governing Council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to...2%, European Central Bank, via statement.
Reuters reports that over the last eight years, .
the ECB bought 3.3 billion euros worth of bonds
under the Asset Purchase Program because the
central bank thought inflation was going to stay down.
On Oct. 27, the central back reiterated its plans to continue reinvesting proceeds from that purchase.
The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time, European Central Bank, via statement.
Additionally, the ECB hopes that by changing the Longer-Term Refinancing Operations terms, banks will be encouraged to pay back loans early. .
The ECB also increased the rates on its Main Refinancing Operation and Marginal Lending Facility to 2.0% and 2.25%, respectively