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European Central Bank President Lagarde talks about a shift in interest rates in the summer

European Central Bank President Lagarde talks about a shift in interest rates in the summer

Bond purchases are set to expire at the start of the third quarter, and a rate hike could come a few weeks after bond purchases end, according to the European Central Bank chief.

European Central Bank– Principal Christine Lagarde Carry the possibility of raising interest rates in the summer. The president of the European Central Bank (ECB) said in Ljubljana on Wednesday that it may take place a few weeks after the end of bond purchases. The end of purchases should take place at the beginning of the third quarter.

Recently, several representatives of the European Central Bank announced a rate hike for July. On Wednesday, European Central Bank President Frank Elderson spoke about the possibility of a key interest rate hike in July. president German Federal BankAnd Joachim Nagel warned against accelerating in light of record inflation in the eurozone. It is important to act quickly to avoid second-round effects such as higher prices and wages and spiraling inflation expectations out of control.

Lagarde’s comments are in line with the July deadline. She said that after the initial rate hike, additional increases should be gradual. The French indicated that inflation is likely to remain high for some time. In April, inflation rose to 7.5 percent. This was the highest level since the introduction of the euro.

Key interest rates in the currency area hit record lows. The deposit rate at which banks can deposit money in the European Central Bank is 0.5 per cent. So you have to pay money for it. The prime rate is currently 0.0 percent. The next ECB interest rate meetings are scheduled for June 9 and July 21. After that, the ECB’s Governing Council will not meet again for its regular monetary policy meeting until September. The background to long and very low interest rates lies in many crises, including the euro crisis and the pandemic. Other western central banks, such as those in the USA and Great Britain, have already raised interest rates.

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(APA / Reuters / dpa)