The European Central Bank raised its key interest rates by 50 basis points on Thursday amid concerns over the financial crisis in the U.S. and a plummet of the Swiss investment bank Credit Suisse.
The deposit rate is now at 3% and the main refinance rate is at 3.5%. The hike came as the Eurozone headline inflation running at 8.5%, which is well above the central bank’s target of 2%.
The central bank said that it is ready to respond on price stability and financial stability. Meanwhile, ECB refrained from giving a signal for future rate moves in statement.
According to a Reuters poll, economists and analysts expected the ECB’s deposit rate to peak at 3.75% in the third quarter, which is 50 basis points higher than the expectations in February for a peak of 3.25%.
